Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 1 of 339 ENVIRONMENTAL PR OTECTION AGENCY 40 CFR Parts 85, 86 and 600 DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 49 CFR Part 575 [EPA–HQ–OAR–2009–0865; FRL_ XXXX-X; NHTSA-2010-0087] RIN 2060-AQ09; RIN 2127-AK73 Revisions and Additions to Moto r Vehicle Fuel Economy Label AGENCY: Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA). ACTION: Proposed Rule. SUMMARY: The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) are conducting a joint rulemaking to redesign and add information to the current fuel economy label that is posted on the window sticker of all new cars and light-duty trucks sold in the U.S. The redesigned label will provide new information to American consumers about the fuel economy and consumption, fuel costs, and environmenta l impacts associated with purchasing new vehicles beginning with model year 2012 cars an d trucks. This action will also develop new labels for certain advanced technology vehicles, which ar e poised to enter the U.S. market, in particular plug-in hybrid elec tric vehicles and el ectric vehicles. NHTSA and EPA are proposing these cha nges because the Energy Independence and Security Act (EISA) of 2007 imposes seve ral new labeling requirements, because the agencies believe that the current labels can be improved to help consumers make more informed vehicle purchase decisions, and because the time is right to develop new labels for advanced technology vehicles that are being commercialized. This proposal is also consistent with the recent joint rule making by EPA and NHTSA that established harmonized federal greenhouse gas (GHG) em issions and corporate average fuel economy (CAFE) standards for new cars, spor t utility vehicles, minivans, and pickup trucks for model years 2012-2016. 1

DATES : Comments : Comments must be received on or before [Insert date 60 days after publication in th e Federal Register] . Under the Paperwork Reduction Act, comments on the information collection provisi ons must be received by the Office of Management and Budget (OMB) on or before [Insert date 30 days after publication in the Federal Register] . See the SUPPLEMENTARY INFORMATION section on “Public Participation” for more in formation about written comments.

1 75 FR 25324, May 7, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 2 of 339 Hearings: NHTSA and EPA will jointly hold one public hearing on [Insert Date] in [insert location]. The hearing will start at 9 a.m. local time and continue until everyone has had a chance to speak. See the SUPPLEMENTARY INFORMATION section on “Public Participation.” for more in formation about the public hearings. ADDRESSES : Submit your comments, identifie d by Docket ID No. EPA-HQ-OAR2009-0865 and/or NHTSA-2010-0087, by one of the following methods:

• www.regulations.gov: Follow the on-line instructions for submitting comments.

• Email: newlabels@epa.gov

• Fax: EPA: (202) 566–1741; NHTSA: (202) 493-2251.

• Mail: o EPA: Environmental Protection Agency, EPA Docket Center (EPA/DC), Air and Radiation Docket, Mail Code 2822T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No. EPA-HQ-OAR2009-0865

. o NHTSA: Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Gr ound Floor, Rm. W12-140, 1200 New Jersey Avenue, SE, Washington, DC 20590. o In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 20503.

• Hand Delivery: o EPA: Docket Center, (EPA/D C) EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC, Attention Docket ID No. EPAHQ-OAR-2009-0865 . Such deliveries are only accepted during the Docket’s normal hours of operation, a nd special arrangements should be made for deliveries of boxed information. o NHTSA: West Building, Ground Fl oor, Rm. W12-140, 1200 New Jersey Avenue, SE, Washington, DC 20590, be tween 9 a.m. and 5 p.m. Eastern Time, Monday through Frida y, except Federal Holidays.

Instructions : Direct your comments to Docket ID No. EPA-HQ-OAR-2009-0865 and/or NHTSA-2010-0087. See the SUPPLEMENTARY INFORMATION section on “Public Participation” for more inform ation about submitting written comments. Public Hearing : NHTSA and EPA will jointly hold a public hearing on [Insert Date], in [Insert Location] at [Insert Address] . See the SUPPLEMENTARY INFORMATION section on “Public Participation” for more information about the public hearings.
Docket : All documents in the dockets are listed in the www.regulations.gov index. Although listed in the index, some info rmation is not publicly available, e.g. , confidential business information (CBI) or other information whose disclosure is re stricted by statute. Certain other material, such as copyrighted ma terial, will be publicly available in hardFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 3 of 339 copy in EPA’s docket, and electronically in NHTSA’s online docket. Publicly available docket materials are availabl e either electronically in www.regulations.gov or in hard copy at the following locations: EPA: EPA Docket Center, EPA/ DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding le gal holidays. The telephone number for the Public Reading Room is (202) 566–1744 . NHTSA: Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Av enue, SE, Washington, DC 20590. The Docket Management Facility is open betw een 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: EPA: Lucie Audette, Office of Transportation and Air Quality, Assessmen t and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor MI 48105; telephone number: 734-214-4850; fax number: 734-214-4816; email address: audette.lucie@epa.gov , or Assessment and Standards Division Hotline; telephone number (734) 214-4636; e-mail address asdinfo@epa.gov

. NHTSA: Gregory Powell, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE, Washington, DC 20590. Telephone: (202) 366-5206; Fax: (202) 493-2990; email address: gregory.powell@dot.gov

. SUPPLEMENTARY INFORMATION: A. Does this Action Apply to Me? This action affects companies that manu facture or sell new light-duty vehicles, light-duty trucks, and medium-duty passenge r vehicles, as defined under EPA’s CAA regulations, 2 and passenger automobiles (passenger cars) and non-passenger automobiles (light trucks) as defined unde r NHTSA’s CAFE regulations. 3 Regulated categories and entities include: Category NAICS Codes A Examples of Potentially Regulated Entities Industry 336111 336112 Motor vehicle manufacturers. Industry 811112 811198 423110 Commercial Importers of Vehicles and Vehicle Components.

Industry 336211 Stretch limousine manufacturers and hearse manufacturers. Industry 441110 Automobile dealers. A North American Industry Cla ssification System (NAICS).

2 “Light-duty vehicle,” “light-duty truck,” and “medium-duty passenger vehicle” are defined in 40 CFR 86.1803-01. Generally, the term “light-duty vehicle” means a passenger car, the term “light-duty truck” means a pick-up truck, sport-utility vehicle, or miniva n of up to 8,500 lbs gross vehicle weight rating, and “medium-duty passenger vehicle” means a sport-utility vehicle or passenger van from 8,500 to 10,000 lbs gross vehicle weight rating. Medium-duty passenger vehicles do not include pick-up trucks. 3 “Passenger car” and “light truck” are defined in 49 CFR Part 523.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 4 of 339 This list is not intended to be exhausti ve, but rather provide s a guide regarding entities likely to be regulated by this action. To determine whether particular activities may be regulated by this action, you should car efully examine the regulations. You may direct questions regarding the applicability of this action to the person listed in FOR FURTHER INFORMATION CONTACT

. B. Public Participation NHTSA and EPA request comment on all as pects of this joint proposed rule. This section describes how you can participate in this process. How Do I Prepare and Submit Comments? In this joint proposal, there are ma ny issues common to both EPA’s and NHTSA’s proposals. For the convenience of all parties, comments submitted to the EPA docket (whether hard copy or electronic) will be considered comments submitted to both EPA and the NHTSA docket, and vice versa. Therefore, the public only needs to submit one set of comments to either one of the tw o agency dockets that will be reviewed by both agencies. Comments that are submitted for consideration by only one agency should be identified as such, and comments that are submitted for consideration by both agencies should be identified as such. Absent such identification, each agency will exercise its best judgment to determine whether a comment is submitted on its proposal. Further instructions for submitting comments to either the EPA or NHTSA docket are described below. EPA: Direct your comments to Docket ID No EPA-HQ-OAR-2009-0865

. EPA’s policy is that all comments received wi ll be included in the public docket without change and may be made available online at www.regulations.gov , including any personal information provided, unless the comme nt includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit informa tion that you consider to be CBI or otherwise protected through www.regulations.gov or e-mail. The www.regulations.gov Web site is an ‘‘anonymous access’’ system, which mean s EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA without going through www.regulations.gov your e-mail address will be automatically captured and includ ed as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include yo ur name and other contact information in the body of your comment and with any disk or CD–ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comme nt. Electronic files should avoid the use of special characters, any form of encryption, a nd be free of any defects or viruses. For additional information about EPA’s public doc ket visit the EPA Docket Center homepage at http:// www.epa.gov/epahome/dockets.htm.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 5 of 339 NHTSA: Your comments must be written and in English. To ensure that your comments are correctly filed in the docket , please include the Docket Number NHTSA2010-0087 in your comments. Your comments mu st not be more than 15 pages long. 4 NHTSA established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments. If you are submitting comments electronically as a PDF (Adobe) file, we ask that the documents submitted be scanned using the Optical Character Recognition (OCR) process, thus allowing the agency to search and copy certain portions of your submissions. 5 Please note that pursuant to the Data Quality Act, in order for the substantive data to be relied upon and used by the agencies, it must meet the inform ation quality standards set forth in the OMB and Department of Transportation (DOT) Data Quality Act guidelines. Accordingly, we encourage you to consult the guidelines in preparing your comments. OMB’s guidelines may be accessed at http://www.whitehouse.gov/omb/fedreg_reproducible (last accessed June 2, 2010), and DOT’s guidelines may be acce ssed at http://regs.dot.gov (last accessed June 22, 2010). Tips for Preparing Your Comments When submitting comments, please remember to:

• Identify the rulemaking by docket numbers and other identifying information (subject heading, Federal Register date and page number).

• Follow directions - The agencies may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree, s uggest alternatives, and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burd ens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns and suggest alternatives.

• Explain your views as clearly as possibl e, avoiding the use of profanity or personal threats. Make sure to submit your comments by the comment period deadline identified in the DATES section above. How Do I Submit Confidential Business Information?

4 49 CFR 553.21. 5 Optical character recognition (OCR) is the process of converting an image of text, such as a scanned paper document or electronic fax file, into computer-editable text.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 6 of 339 Any confidential business information (CBI) submitted to one of the agencies will also be available to the other agency. 6 However, as with all public comments, any CBI information only needs to be submitted to eith er one of the agencies’ dockets, and it will be available to the other. Following are spec ific instructions for submitting CBI to either agency. EPA: Do not submit CBI to EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the info rmation that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addi tion to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR Part 2. In addition, you should submit a copy from which you have deleted the claimed confidential business in formation to the Docket by one of the methods set forth above. NHTSA: If you wish to submit any info rmation under a claim of confidentiality, you should submit three copies of your comple te submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given above under FOR FURTHER INFORMATION CONTACT . When you send a comment containing confidential busin ess information, you should include a cover letter setting forth the information specified in our confidential business information regulation. 7 In addition, you should submit a copy from which you have deleted the claimed confidential business in formation to the Docket by one of the methods set forth above. Will the Agencies Consider Late Comments? NHTSA and EPA will consider all comments received before the close of business on the comment closi ng date indicated above under DATES . To the extent practicable, we will also consider comments receiv ed after that date. If interested persons believe that any new information the agency places in the docket affects their comments, they may submit comments after the closi ng date concerning how the agency should consider that information for the final rule. However, the agencies’ ability to consider any such late comments in this rulemaking will be limited due to the time frame for issuing a final rule. If a comment is received t oo late for us to practicabl y consider it in developing a final rule, we will consider that comment as an informal suggestion for future rulemaking action.

6 This statement constitutes notice to commenters pursuant to 40 CFR 2.209(c) that EPA will share confidential information received w ith NHTSA unless commenters specify that they wish to submit their CBI only to EPA and not to both agencies. 7 49 CFR part 512.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 7 of 339 How Can I Read the Comments Submitted By Other People? You may read the materials placed in the docket for this document ( e.g. , the comments submitted in response to this docum ent by other interested persons) at any time by going to http://www.regulations.gov. Follow the online instructions for accessing the dockets. You may also r ead the materials at the EP A Docket Center or NHTSA Docket Management Facility by going to the street addresses given above under ADDRESSES

. How do I participate in the public hearings? NHTSA and EPA will jointly host one public hearing on the date and location described in the DATES and ADDRESSES sections above. If you would like to present testimony at the public hearings, we ask that you notify the EPA and NHTSA contact persons listed under FOR FURTHER INFORMATION CONTACT at least ten days before the hearing. Once EPA and NHTSA learn how many people ha ve registered to speak at the public hearing, we will allocate an appropriate amount of time to each participant, allowing time for lunch and necessary breaks throughout the day. For planning purposes, each speaker should anticipate speaking for approximately ten mi nutes, although we may need to adjust the time for each speaker if there is a large turnou t. We suggest that you bring copies of your statement or other material for the EPA and NHTSA panels and the audience. It would also be helpful if you send us a copy of your statement or other materials before the hearing. To accommodate as many speakers as po ssible, we prefer that speakers not use technological aids ( e.g. , audio-visuals, computer slideshow s). However, if you plan to do so, you must notify the contact persons in the FOR FURTHER INFORMATION CONTACT section above. You also must ma ke arrangements to provide your presentation or any other aids to NHTSA and EPA in advance of the hearing in order to facilitate set-up. In addition, we will rese rve a block of time for anyone else in the audience who wants to give testimony. The hearing will be held at a site acce ssible to individuals with disabilities. Individuals who require accommodations such as sign language interpreters should contact the persons listed under FOR FURTHER INFORMATION CONTACT section above no later than ten days before the date of the hearing. NHTSA and EPA will conduct the hearing informally, and technical rules of evidence will not apply. We will arrange for a written transcript of the hearing and keep the official record of the hearing open fo r 30 days to allow you to submit supplementary information. You may make arrangements for c opies of the transcript directly with the court reporter. Table of ContentsFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 8 of 339 I. Overview of Joint EPA/NHTSA Proposal on New Vehicle Labels A. Summary of and Rationale for Proposed Label Changes B. A Comprehensive Research Program In formed the Development of Proposed Labels C. When Would The Proposed Label Changes Take Effect? D. What Are The Estimated Costs and Bene fits of the Proposed Label Changes? E. Relationship of This Proposal to Other Federal and State Programs F. History of Federal Fuel Economy Label Requirements G. Statutory Provisions and Legal Authority 1. Energy Policy and Conservation Act (EPCA) 2. Energy Independence and Security Act (EISA) II. Proposed Revisions to the Fuel Economy Label Content (Metrics and Rating Systems) A. Conventional Gasoline, Dies el and Hybrid Vehicles 1. Fuel Economy Performance 2. Fuel Consumption 3. Greenhouse Gas Performance 4. Fuel Economy and Greenhouse Gas Rating Systems 5. Other Emissions Performance and Rating System 6. Overall Energy and Environmental Rating 7. Indicating Highest Fuel Econom y/Lowest Greenhouse Vehicles 8. SmartWay Logo 9. Annual Fuel Cost 10. Relative Fuel Savings or Cost 11. Range of Fuel Economy of Comparable Vehicles 12. Other Label Text 13. Gas Guzzler Tax Information B. Advanced Technology Vehicle Labels 1. Introduction 2. EPA Statutory Requirements 3. Principles Underlying the Co-Proposed Advanced Technology Vehicle Labels 4. Key Advanced Technology Vehicle Label Issues C. Labels for Other Vehicle/Fuel Technologies 1. Flexible Fuel Vehicles 2. Compressed Natural Gas Vehicles 3. Dual Fuel Natural Gas & Gasoline Vehicles III. Proposed Revisions to Fuel Economy Label Appearance A. Proposed Label Designs 1. Label 1 2. Label 2 B. Alternative Label Design (Label 3)Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 9 of 339 IV. Agency Research On Fuel Economy Labeling A. Methods of Research 1. Literature Review 2. Focus Groups 3. Internet Survey 4. Expert Panel B. Key Research Questions and Findings 1. Effective Metrics and Rating Systems for Existing and New Label Information 2. Effective Metrics and Ratings System s for Advanced Technology Vehicles 3. Effective Metrics to Enable Vehicle Comparison 4. Effective Whole Label Designs 5. Tools beyond the Label V. Implementation of the New Label A. Timing B. Labels for 2011 model year advanced technology vehicles C. Implementation of Label Content VI. Additional Related EPA Proposals A. Electric and Plug-In Hybrid Elec tric Vehicle Test Procedures 1. Electric Vehicles 2. Plug-in Hybrid Electric Vehicles B. Utility Factors 1. Utility Factor Background 2. General Application of Utility Factors 3. Calculating combined values usi ng Cycle Specific Utility Factors 4. Low Powered Vehicles. C. Comparable Class Categories D. Using Smartphone QR Codes ® to Link to Fuel Economy InformationFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 10 of 339 E. Fuel Economy Information in the context of the “M onroney” Sticker F. Miscellaneous Amendments and Corrections VII. Projected Impacts of the Proposed Requirements A. Costs Associated with this Rule 1. Operations and Maintenance Costs and Labor Hours 2. Facility Costs 3. Startup Costs 4. Cost Summary B. Impact of Proposing One Label to Meet EPCA/EISA C. Benefits of Label Changes D. Summary VIII. Agencies’ Statutory Authority and Executive Order Reviews A. Relationship of EPA’s Proposed Requi rements With Other Statutes and Regulations 1. Automobile Disclosure Act 2. Internal Revenue Code 3. Clean Air Act 4. Federal Trade Commission Guide Con cerning Fuel Economy Advertising for New Vehicles 5. California Environmental Performance Label B. Statutory and Executive Order Reviews 1. Executive Order 12866: Regulatory Planni ng and Review and DOT Regulatory Policies and Procedures (NHTSA only) 2. Paperwork Reduction Act 3. Regulatory Flexibility Act 4. Unfunded Mandates Reform Act 5. Executive Order 13132: Federalism 6. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments 7. G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks 8. Executive Order 13211: Actions That Si gnificantly Affect Energy Supply, Distribution or Use 9. National Technology Transfer Advancement Act 10. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations. List of Acronyms and Abbreviations A/C Air Conditioning AC Alternating Current AIDA Automobile Information Disclosure Act BTU British Thermal Units CAA Clean Air Act CAFE Corporate Average Fuel Economy CARB California Air Resources Board CBI Confidential Business InformationFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 11 of 339 CD Charge Depleting CFR Code of Federal Regulations CH 4 Methane CNG Compressed Natural Gas CO Carbon Monoxide CO 2 Carbon Dioxide CREE Carbon-related Exhaust Emissions CS Charge Sustaining DOE Department of Energy DOT Department of Transportation E85 A mixture of 85% et hanol and 15% gasoline EISA Energy Independence and Security Act of 2007 EO Executive Order EPA Environmental Protection Agency EPCA Energy Policy and Conservation Act EREV Extended Range Electric Vehicle EV Electric Vehicle FCV Fuel Cell Vehicle FE Fuel Economy FFV Flexible Fuel Vehicle FTC Federal Trade Commission FTP Federal Test Procedure GHG Greenhouse Gas GVWR Gross Vehicle Weight Rating HCHO Formaldehyde HEV Hybrid Electric Vehicle HFC Hydrofluorocarbon HFET Highway Fuel Economy Test ICI Independent Commercial Importer IT Information Technology ICR Information Collection Request LEV II Low Emitting Vehicle II LEV II opt 1 Low Emitting Vehicle II, option 1 MDPV Medium Duty Passenger Vehicle MPG Miles per Gallon MPGe Miles per Gallon equivalent MY Model Year N 2 O Nitrous Oxide NAICS North American Indus try Classification System NEC Net Energy Change NHTSA National Highway Traffic Safety Administration NMOG Non-methane Organic Gases NO X Oxides of Nitrogen NPRM Notice of Proposed Rulemaking NTTAA National Technology Transfer and Advancement Act of 1995Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 12 of 339 O&M Operations and Maintenance OCR Optical Character Recognition OMB Office of Management and Budget PEF Petroleum Equivalency Factor PHEV Plug-in Hybrid Electric Vehicle PM Particulate Matter PZEV Partial Zero-Emissions Vehicle R CDA Actual Charge Depleting Range RESS Rechargeable Energy Storage System RFA Regulatory Flexibility Act SAE Society of Automotive Engineers SAFETEA-LU Safe, Accountable, Flexible , Efficient Transportation Equity Act: A Legacy for Users SBA Small Business Administration SFTP Supplemental Federal Test Procedure SOC State-of-Charge SULEV II Super Ultra Low Emission Vehicles II SUV Sport Utility Vehicle UDDS Urban Dynamometer Driving Schedule UF Utility Factor ULEV II Ultra Low Emission Vehicles II UMRA Unfunded Mandates Reform Act ZEV Zero Emission Vehicle
I. Overview of Joint EPA/NHTSA Pr oposal on New Vehicle Labels A. Summary of and Rationale for Proposed Label Changes This join t action by the Environmental Pr otection Agency (EPA) and the National Highway Traffic Safety Admini stration (NHTSA) proposes what will likely be the most significant overhaul of the federal government’s fuel economy label or “sticker” since its inception over 30 years ago. The current fuel economy label requir ed on all new passeng er cars, light-duty trucks, and medium-duty passenger vehicles co ntains the following core information, as required by statute:

• City and highway fuel economy values in miles per gallon

• Comparison of the vehicle’s combined city /highway fuel economy to a range of comparable vehicles

• Estimated fuel cost to operate the vehicle for one year This joint proposal is designed to update th e current label in order to increase the usefulness of the label in helping consumer s choose more efficient and environmentally friendly vehicles that would also meet new requirements added by Congress. ThisFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 13 of 339 proposal also includes new label designs for electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs), two advanced ve hicle technologies that are beginning to enter the market. EPA and NHTSA are co-proposing two labe l designs for public comment without a single primary proposal, although the final ru le will adopt only one label design. Both label designs meet statutory requirements and rely on the same underlying data; they differ in how the data is used and presented on the label. One is a more traditional label design that retains the current label’s focus on fuel economy values and annual fuel cost projections, with a general labe l layout more similar to th e current label. The second label design contains all appropr iate information but prominently features a letter grade to communicate the overall fuel economy a nd greenhouse gas emissions – along with projected 5-year fuel cost or savings associated with a part icular vehicle when compared to an average vehicle. The agencies are al so seeking comment on an alternative third label design that follows a more traditional format but presents some information differently. All labels expand upon the conten t found on the current label and include the following information for conventional vehi cles (advanced technology vehicle labels contain additional information tailo red to the individual technology):

• City and highway fuel economy values in miles per gallon

• Combined city/highway fuel cons umption in gallons per 100 miles

• Tailpipe carbon dioxide (CO 2 ) emissions in grams per mile

• Annual fuel cost in dollars per year

• A slider bar comparing the combined fuel economy to all other vehicles

• A slider bar comparing the CO 2 emissions to all other vehicles

• A slider bar comparing non-CO 2 (“other” or “smog-related”) emissions to all other vehicles

• A symbol that can be read by a ‘Smart phone’ for additional consumer information (also known as a QR Code ® )

• A reference to a federal government website for additional information Despite the fact that the co -proposed labels are based on the same underlying data, they are significantly different in terms of pr esentation and prominence. The agencies encourage public feedback on the central question of which label design would be more useful and help consumers select more en ergy efficient and environmentally friendly vehicles that meet their needs, or whethe r the agencies should consider alternative designs. NHTSA and EPA are proposing these cha nges because the Energy Independence and Security Act (EISA) of 2007 mandates several new labe ling requirements intended to help consumers make more informed vehicle purchase decisions, and because this is an appropriate time to develop new labels for advanced technology vehicles (Battery Electric or EVs and Plug-In Hybrid Vehicles or PHEVs) that are be ing commercialized. The agencies believe that a joint label mee ting our separate statutory requirements and our shared consumer information objectives makes far more sense for both consumers and manufacturers than separa te labels. As a joint rulemaking, this proposal is alsoFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 14 of 339 consistent with the recent joint rule making by EPA and NHTSA that established harmonized federal greenhouse gas (GHG) em issions and corporate average fuel economy (CAFE) standards for new cars, spor t utility vehicles, minivans, and pickup trucks for model years 2012-2016. 8 The agencies believe these new labeling requirements for automobiles are important in light of a gr owing national interest in both fuel economy and climate change. Historically, consumers have generally paid the most attention to fuel economy when fuel prices increase sharply over a s hort period of time, such as in 2008, but the agencies believe that this phenomenon has changed and consumers will continue in the future to pay more attention to fuel econom y. Based on projections from the U.S. Energy Information Administration that future gasoli ne prices will increase over coming decades due to global economic growth and oil demand, we believe that it is likely that consumer interest in and use of the fuel economy label will grow over time. 9 In addition, given the increased awareness of consumers regardi ng climate change and air pollution, more comprehensive information on the emissions performance of vehicles, as required by EISA, could help consumers make more info rmed decisions on how a vehicle they buy may impact the environment. It is also important for the agencies to define labeling requirements for advanced vehicle technologies that are nearing co mmercialization. The existing label has long provided city and highway fuel economy in terms of miles per gallon (MPG) values, which the agencies believe are well rec ognized and understood by consumers, and which are widely used as metrics for comparing the e fficiency of one vehicle to another. Since the late 1970s when the fuel economy label was first established by EPA as required under the Energy Policy Conservation Ac t (EPCA) of 1975, over 99 percent of the automobiles sold have been conventional, in ternal-combustion engine vehicles that run on petroleum-based fuels (or a liquid fuel blend dominated by petroleum). When manufacturers produced differe nt advanced technology vehi cles, such as compressed natural gas vehicles, EPA has generally addres sed the need for labels on a case-by-case basis. Over the next several model years, howeve r, the agencies expect to see increasing numbers of EVs and PHEVs entering the mark etplace. This proposal includes changes to the label to address some of the specific issu es raised by the use of grid electricity as a fuel for EVs and PHEVs. These vehicles will be required to display labels containing the same kind of information as conventional vehi cles, but some of that information may be better conveyed in different ways, and cons umers may be interested in different information for these vehicles. For example, evaluating the performance of a vehicle that uses grid electricity as some or all of its fuel, or the cost of operating such a vehicle, presents unique challenges for making an informed comparison between different EVs and PHEVs, and between advanced technology vehicles and their conventional vehicle

8 75 FR 25324, May 7, 2010. 9 Annual Energy Outlook 2010, Department of Energy, Energy Information Administration, DOE/EIA0383 (2010), May 11, 2010, available at http://www.eia.doe.gov/oiaf/aeo/index.html

.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 15 of 339 counterparts including gasoline and diesel fueled vehicles and hybrid gasoline electric vehicles (HEVs). The co-proposed label designs present tw o approaches for addressing the complex challenges associated with labels for th ese advanced technolo gy vehicles, and the agencies encourage the public to comment on a wide range of possible solutions. The agencies recognize that this is only the firs t generation of EV and PHEV labels, and we expect to refine them over time as we ha ve done with conventi onal vehicle labels. Additionally, the agencies recognize that ot her advanced technology vehicles, such as fuel cell vehicles (FCVs), may enter the mark etplace in the near future as well, but for purposes of this first effort we have chosen to focus on EVs and PHEVs. Specific label requirements for other advanced technology vehicl es will be developed at a later time as those vehicles enter the market. This joint proposal is designed to satisfy each agency’s statutory responsibilities in a manner that maximizes usefulness fo r the consumer, while avoiding unnecessary burden on the manufacturers who prepare the vehicle labels. Since 1977, EPA has required auto manufacturers to label all new automobiles, 10 pursuant to EPCA. 11 As amended, EPCA requires that labels sha ll contain the following information: (1) the fuel economy of the automobile; (2) the estimated annual fuel co st of operating the automobile; (3) the range of fuel economy of comp arable vehicles of all manufacturers; (4) a statement that a booklet is availabl e from the dealer to assist in making a comparison of fuel economy of other autom obiles manufactured by all manufacturers in that model year; (5) the amount of the automobile fuel e fficiency tax (“gas guzzler tax”) imposed on the sale of the automobile under secti on 4064 of the Internal Revenue Code of 1986 (26 U.S.C. 4064); and (6) other information required or author ized by the EPA Administrator that is related to the information requi red by (1) through (4) above. 12 In the Energy Independence and Security Act of 2007 (EISA), 13 Congress required that NHTSA, in consultation with EPA and the Department of Energy (DOE), establish regulations to implement se veral new labeling requirements for new automobiles. 14 NHTSA must develop a program that requires manufacturers to label new automobiles with information reflecting an auto mobile’s performance with respect to fuel economy and greenhouse gas and other emissions over the useful life of the automobile based on criteria provided by EPA. 15 NHTSA must also develop a rating system that makes it easy for consumers to compare th e fuel economy and greenhouse gas and other

10 An “automobile” is defined for these purposes as a “4-wheeled vehicle that is propelled by fuel, or by alternative fuel, manufactured primaril y for use on public streets, roads, and highways” and “rated at not more than 8,500 pounds gross vehicle weight.” See 49 U.S.C. 32901(a)(3) and 32908(a)(1). 11 Pub. L. 94-163. 12 49 U.S.C. 32908(b). 13 Pub. L. 110-140. 14 EISA Sec. 108, codified at 49 U.S.C. 32908(g). 15 49 U.S.C. 32908(g)(1)(a)(i).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 16 of 339 emissions of automobiles at the point of pur chase, including designa tions of automobiles with the lowest GHG emissions over the useful life of the vehicles, and the highest fuel economy. 16 Thus, either the basic label for automobiles needs to be expanded to include additional information on performance in terms of fuel economy, greenhouse gas and other emissions, or a new label needs to be required. NHTSA and EPA believe that a joint rulemaking to combine all of these elements into a single revised fuel economy label is the most appropriate way to meet the goa ls described above, ra ther than placing the information in two separate labels with duplicative and overlapping information, which could cause consumer confusion and impos e unnecessary burden on the manufacturers. 17 Finally, given the goals described abov e and the need to provide additional information on the label, the agencies believe that the overall vehicle label design format and content should be reev aluated and could be improved. Simply including the additional information required under EISA for both conventional and advanced technology vehicles necessitates a revi ew of the overall label design. As described above, the agencies view the purpose of the label as providing information that will be most useful for consumers in making informed decisions regarding the energy efficiency and emissions impacts of the vehicles they purchase. Providing information on energy, environmenta l performance, and cost can educate consumers in various ways. These metrics ha ve the potential to he lp people who value this kind of information to make a more in formed choice among different vehicles. It also has the potential to inform people who currently place less or even no value on this kind of information, but who may decide it is mo re important to them at some point in the future. NHTSA and EPA are mindful that this is a complicated issue and that there is no readily ascertainable metric to determine whether we have achie ved this somewhat subjective and qualitative purpose. Theref ore, EPA and NHTSA are co-proposing two options, and also taking comment on another alternative, th at highlight a number of relevant issues on which we seek public commen t. The agencies will consider all public comments and publish a final rule in the near future. B. A Comprehensive Research Program Informed the Development of Proposed Labels Since today’s proposal includes adding im portant new elem ents to the existing label as well as creating new labels for advanced technology vehi cles, EPA and NHTSA embarked on a comprehensive and innovative re search program beginning in the fall of 2009. The research helped inform the devel opment of the new labels being proposed and included three phases of consumer focus groups , a review of availa ble literature, and a day long consultation with an expert panel of individuals who have introduced new products or have spearheaded nati onal educational campaigns.

16 49 U.S.C. 32908(g)(1)(a)(ii). 17 The agencies also raised the issue of the upcoming labeling requirements in the recent joint rulemaking for MYs 2012-2016 CAFE and GHG standards for light-duty vehicles, 75 FR 25324 (May 7, 2010).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 17 of 339 For the focus groups, the agencies decided to use a three-phase approach in order to accommodate the sheer amount of informati on intended to be covered in the groups, as well as to use each phase to inform the next phase to help evolve the overall label design in regard to both content and appearance. Focus groups were held beginning in late February through May 2010 in four cities: Charlotte, Houston, Chi cago, and Seattle. Overall, 32 focus groups were convened with a total of 256 particip ants. We asked the focus groups about the following issues:

• How they use the current fuel economy label

• What feedback they could give us on pot ential new information and metrics for the label for conventional and advanced technology vehicles (EVs and PHEVs), and

• What feedback they could give us, after reviewing draft labels, on designs and the level of information that makes sense, as well as overall preference for displaying information. The insights received from the focus groups were key for the agencies with regard to individual metrics that consumers wanted to see on labels and al so with regard to effective label designs. Overall, focus groups indicated 18 that redesigned labels must:

 Create an immediate first impression for consumers

 Be easy to read and understand quickly

 Clearly identify vehicle tec hnology (conventional, EV, PHEV)

 Utilize color

 Chunk information to allow people to deal with “more information”

 Be consistent in content a nd design across technologies

 Allow for comparison across technologies

 Make it easy to identify the most fuel efficient and environmentally friendly vehicles Following the focus group research, we assembled an expert panel for a one day consultation and asked them to give us f eedback on the draft label designs the focus groups had helped create and to also assist us in identifying opport unities and strategies to provide more and better information to c onsumers so that they can more easily assess the costs, emissions, and energy efficiency of different vehicles. The experts came from a variety of fields in advertising and product development, and were chosen because they have led successful national efforts to introduce new products or have spearheaded national educational campaigns. After viewing the draft labels, the expert panel offered

18 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903,August 2010; Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R10-904, August 2010 ; and Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 18 of 339 the agencies the following insights and guidance 19 that were key in developing one of the co-proposed label designs, including:

 Keep it simple; we yearn for simplicity (fewer, bigger, better)

 Consumers don’t act on details

 Remember the reality of very short label viewing time - roll ratings and metrics up into a single score

 Use cost savings information- a very strong consumer motivator

 Develop a web site that would be launc hed in conjunction with the new label. This consumer-focused, user friendly web site would provide more specific information on the label including addition information on the letter grade, along with access to the tools, app lications, and social media. Beyond these two core research elem ents, the agencies also undertook a comprehensive literature review 20 and drafted and had peer revi ewed an internet survey. The agencies intend to administer the survey concurrently with the release of this proposal, and the results will be made publicly available in the dockets for this proposal prior to issuing a final rule w ith the new label requirements. The agencies also met with a number of stakeholders, including environmental organizations, auto manufacturers, and dealers, to gather their input on what the label should and should not contain, as well as to ascertain particular concerns. 21 Comments received on labeling issues in the context of the joint rulemaking on fuel economy and GHG standards, 22 as well as for the 2006 fuel economy labeling rule, 23 have also been considered. C. When Would The Proposed Label Changes Take Effect? The agencies propose th at the final label changes will take effect for model year (MY) 2012 vehicles, consistent with the recent joint rulemaking by EPA and NHTSA that established harmonized federal GHG emi ssions and CAFE standards for new cars, sport utility vehicles, minivans, and pi ckup trucks for model years 2012 through 2016. 24 For those advanced technology ve hicles that will be introduc ed to the market prior to MY2012, EPA will work with individual manuf acturers on a case-by-case basis to develop interim labels under EPA’s current re gulations that can be used prior to MY2012 and that are consistent with the propose d labels for advanced technology vehicles.

19 Environmental Protection Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908, August 2010. 20 Environmental Protection Agency Fuel Economy Label: Literature Review, EPA420-R-10-906, August 2010. 21 Pursuant to DOT Order 2100.2, NHTSA will place a memorandum recording those meetings it attended, and attach documents submitted by stakeholders, as appropriate, when the information received formed a basis for this proposal, and the information can be made public, in the docket for this rulemaking. . 22 Available at Docket No. NHTSA-2009-0059 and EPA-HQ-OAR-2009-0472. 23 Available at Docket No. EPA-HQ-OAR-2005-0169. 24 75 FR 25324, May 7, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 19 of 339 D. What Are The Estimated Costs a nd Benefits of the Prop osed Label Changes? The primary costs associated with this proposed rule come from revisions to the fuel economy label and new test ing requirements. As discus sed in Section VII of this preamble, we estimate that the costs of this rule are likely to be in the range of $649,000 – $2.8 million per year. This rule is not economically significant under Executive Order 12866 or any DOT or EPA policies and pro cedures because it does not exceed $100 million or meet other related standards. The primary benefits associated with this proposed rule come from any improvements in consumer decision-making th at may lead to reduced vehicle and fuel costs for them. There may be additional e ffects on criteria pollu tants and greenhouse gas emissions. At this time, EPA and NHTSA do not believe it is feasible to fully develop a complete benefits analysis of the potential benefits. EPA and NHTSA request comment on the assessment of the benefits and costs presented in Section VII below. E. Relationship of This Proposal to Other Federal and State Programs This proposal involves the addition of new infor mation and design changes to conventional vehicle labels and the creation of specific labels for certain advanced vehicle technologies, but will not impact other important elements of the federal government’s fuel economy and GHG emissions regulatory programs. For example, this proposal will not affect the fuel economy compliance values used in NHTSA’s CAFE program, or the GHG emissions compliance values used in EPA’s GHG emissions control program. Nor will th is proposal affect the met hodology by which EPA generates the consumer fuel economy values used on the vehicle labels and provided at www.fueleconomy.gov . The result of the additi onal information, including environmental information, appearing on the label will necessitate that additional information also be displayed on this website in the future. Finally, this proposal does not affect the test procedures that are used by EPA and manufacturers to generate the federal government’s vehicle fuel econom y and GHG emissions database. This proposal also does not a ffect the vehicle labels re quired by the California Air Resources Board which indicate relative rati ngs for “Smog” and “Global Warming,” in fulfillment of that state’s statutory requirements. The agencies are aware that the California labels provide information that is effectively duplicative with some of the information on the labels that will result from this rulemaking effort, although using different underlying rating met hodologies and presentational a pproaches. It is the hope of both NHTSA and EPA that the Federal la bel can meet the CA RB requirements and, thus, preclude the need for a separate set of labels. However, it is ultimately up to California to determine how to implement its statue and, thus, beyond the purview of this rulemaking to make any such determination.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 20 of 339 F. History of Federal Fuel Economy Label Requirements The fuel economy label has evolved se veral times since it was first required by Congress in the 1970s, both in response to new statutory requirements and to changing policy objectives. There have been important changes in the past to make the label more technically accurate and unders tandable to consumers. The changes being proposed are consistent with past efforts by EPA to ma ke the fuel economy label more consumer friendly and effective over time. This secti on provides a brief historical summary of the development of the fuel economy label. The Energy Policy and Conservation Act of 1975 (EPCA) established two primary fuel economy requirements: (1) fuel economy information, designed for public use, in the form of fuel economy labels posted on all new motor vehicles, and the publication of an annual booklet of fuel econom y information to be made available free to the public by car dealers; and (2) calculati on of a manufacturer's average fuel economy and compliance with a standard (later, th is compliance program became known as the Corporate Average Fuel Economy (CAFE) pr ogram). The responsibilities for these requirements were split between EPA, th e Department of Transportation (DOT) 25 and the Department of Energy (DOE). EPA is respon sible for establishing the test methods and procedures both for determining the fuel economy estimates that are displayed on the labels and in the annual booklet, and for the calculation of a manufacturer's corporate average fuel economy. DOT, and by delegation, NHTSA, is responsible for administering the CAFE compliance program, which includ es establishing standards, determining compliance, and assessing any penalties as needed. DOE is responsible for publishing and distributing the annual fuel economy information booklet. EPA published regulations implementing portions of the EPCA statute in 1976. 26 The provisions in this regulation, effective w ith the 1977 model year, established the first fuel economy label along with the procedur es to calculate fuel economy values for labeling and CAFE purposes that used the Fe deral Test Procedure (FTP or “city” test) and the Highway Fuel Economy Test (HFET or “highway” test) data as the basis for the calculations. At that time, th e fundamental process for determining fuel economy was the same for labeling as for CAFE, except that the CAFE calculations combined the city and highway fuel economy values into a si ngle number for manufacturers’ compliance purposes. 27 After a few years of public exposure to the fuel economy estimates on the labels of new vehicles, it soon became apparent that drivers were disappointed by not often achieving these estimates on the road and expected them to be as accurate as possible. In 1978, Congress recognized the concern about differences between EPA-estimated fuel

25 The CAFE-related responsibilities of the Secretar y of Transportation are delegated to the NHTSA Administrator at 49 CFR 1.50. 26 41 FR 38685, promulgated at 40 CFR Part 600. 27 EPCA requires that manufacturers simply comply w ith passenger car and light truck CAFE standards, it does not require separate city and highway standards for each type of automobile. Thus, EPA calculates the average fuel economy for a manuf acturer by weighting and combining the results of each automobile on the separate city and highway cycles. See 49 U.S.C. 32904(c).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 21 of 339 economy values and actual consumer experi ence and mandated a study under section 404 of the National Energy Conservation Policy Act of 1978. 28 In February 1980, a set of hearings were conducted by the U.S. H ouse of Representatives Subcommittee on Environment, Energy, and National Resources . One of the recommendations in the subsequent report by the Subcommittee was th at “EPA devise a new MPG system for labeling new cars and for the Gas Mileage Guid e that provides fuel economy values, or a range of values, that most drivers can reasonably expect to experience.” 29 EPA commenced a rulemaking process in 1980 to revise its fuel economy labeling procedures, and analyzed a vast amount of in-use fu el economy data as part of that rulemaking. 30 In 1984, EPA published new fuel economy labeling procedures that were applicable to 1985 and later model year vehicles. 31 The decision was made to retain the FTP and highway test procedures, primarily because those procedures were also used for other purposes, including emissions certi fication and CAFE determination. Based on the in-use fuel economy data, however, it was evident that the final fuel economy values put on the labels needed to be adjusted downward in order to reflect more accurately consumers’ average fuel economy experience. The final rule, therefore, included downward adjustment factors for both the city and highway label fuel economy estimates. The city values (based on the raw FTP test data) were adjusted downward by 10 percent and the highway valu es (likewise based on the raw highway test data) were adjusted downward by 22 percent. 32 In the early 2000s, EPA again began inve stigating the accuracy of the fuel economy label estimates, and concluded that dr iving behavior (e.g., higher average speed and acceleration) and other fact ors (such as the use of ethanol as a gasoline blending agent) had changed significantly since the correction factors were implemented in 1985, leading again to a widening gap between real-w orld fuel economy and the label estimates that consumers saw when shopping for new vehi cles. During the development of vehicle emissions regulations in the la te 1990s, EPA had already conc lusively found that the city and highway tests did not adequately repres ent real-world drivi ng, and in December of 2006 EPA finalized new test methods for calculating the fuel economy label values. 33 The 2006 final rule made three importan t changes. First, EPA’s new methods brought the miles per gallon estimates clos er to consumers' actual fuel economy by including factors such as high speeds, quick er accelerations, air conditioning use, and driving in cold temperatures. These revised fuel economy estimates also reflect other conditions that influence fuel economy, like ro ad grade, wind, tire pressure, load, and the

28 Pub. L. 95-619, Title IV, 404, November 9, 1978. 29 House Committee on Government Operations, ``Automobile Fuel Economy: EPA's Performance,'' Report 96-948, May 13, 1980. 30 “Passenger Car Fuel Economy: EPA and Road,'' U.S. Environmental Protection Agency, Report no. EPA 460/3-80-010, September, 1980, and ``Technical Support Report for Rulemaking Action: Light DutyVehicle Fuel Economy Labeling,'' U.S. Environmental Protection Agency, Report no. EPA/AA/CTAB/FE81-6, October, 1980. 31 49 FR 13845, April 6, 1984, and 49 FR 4 8149, December 10, 1984. 32 49 FR 13845, April 6, 1984. 33 71 FR 77872, December 27, 2006.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 22 of 339 effects of different fuel properties. The ne w estimates took effect with model year 2008 vehicles. Second, EPA now requires fuel econom y labels on certain heavier vehicles up to 10,000 pounds gross vehicle weight, such as larger SUVs and vans. Manufacturers will be required to post fuel economy labels on these vehicles beginning with the 2011 model year. Third, to convey fuel economy informa tion to the public more effectively, EPA updated the design and content of the label. The rule required that ne w labels be placed on vehicles manufactured af ter September 1, 2007. The fuel economy for each vehicle model continues to be presented to consum ers on the label as city and highway MPG estimates. G. Statutory Provisions and Legal Authority 1. Energy Policy and Conservation Act (EPCA) Under EPCA, EPA is responsible for develo ping the fuel economy labels that are posted on all new light duty car s and trucks sold in the U. S and beginning in MY 2011 all new medium duty trucks as well. Medium -duty passenger vehicles are a subset of vehicles between 8,500 and 10,000 pounds gross vehi cle weight that in cludes large sport utility vehicles and vans, but not pickup tr ucks. EPCA requires the manufacturers of automobiles to attach the fuel economy label in a prominent place on each automobile manufactured in a model year and also require s auto dealerships to maintain the label on the automobile. 34 EPCA specifies the information that is minimally required on every fuel economy label. 35 As stated above, labels must include:

• The fuel economy of the automobile,

• The estimated annual fuel cost of operating the automobile.

• The range of fuel economy of comparable automobiles of all manufacturers,

• A statement that a booklet is available from the dealer to assist in making a comparison of fuel economy of other automobiles manufactured by all manufacturers in that model year,

• The amount of the automobile fuel ef ficiency tax imposed on the sale of the automobile under section 4064 of the Internal Revenue Code of 1986; 36 and

• Other information required or author ized by the Administrator that is related to the information required [within the first four items]. Under the provision for “other informati on” EPA has previously required the statements “your actual mileage will vary depending on how you drive and maintain your vehicle,” and cost estimates “based on 15,000 miles at $2.80 per gallon” be placed on vehicle labels.

34 49 U.S.C. 32908(b)(1). 35 49 U.S.C. 32908(b)(2)(A) through (F). 36 26 U.S.C. 4064.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 23 of 339 There are additional labeling requireme nts found in EPCA for “dedicated” automobiles and “dual fueled” automobiles. A dedicated automobile is an automobile that operates only on an alternative fuel. 37 Dedicated automobile labels must also display the information noted above. A dual fueled vehicle is a vehicle whic h is “capable of operating on alternative fuel or a mixture of biodiesel and diesel fuel, and on gasoline or diesel fuel” for the minimum driving range (defined by the DOT). 38 Dual fueled vehicle labels must:

• Indicate the fuel economy of the automobile when operated on gasoline or diesel fuel.

• Clearly identify the automobile as a dual fueled automobile.

• Clearly identify the fuels on which the automobile may be operated; and

• Contain a statement informing the consumer that the additional information required by subsection (c )(2) [the information booklet] is published and distributed by the Secretary of Energy. 39 EPCA defines “fuel economy” for purposes of these vehicles as “the average number of miles traveled by an automobile for each gallon of gasoline (or equivalent amount of other fuel) used, as determined by the Administrator [of the EPA] under section 32904(c) [of this title].” 40 Additionally, EPA is requi red under EPCA to prepare a fuel economy booklet containing information that is “s imple and readily understandable.” 41 The booklet is commonly known as the annual “Fuel Economy Gu ide.” EPCA further instructs DOE to publish and distribute the booklet. EPA is re quired to “prescribe regulations requiring dealers to make the booklet available to prospective buyers.” 42 While the booklet continues to be available in paper form , in 2006, EPA finalized regulations allowing manufacturers and dealers to make the Fuel Economy Guide available electronically to customers as an option. 43 2. Energy Independence and Security Act (EISA)

37 49 U.S.C. 32901(a)(1) defines “a lternative fuel” as including —(A) methanol; (B) denatured ethanol; (C) other alcohols; (D) except as provided in subsection(b) of this section, a mixture containing at least 85 percent of methanol, denatured ethanol, and other alcohols by volume with gasoline or other fuels; (E) natural gas; (F) liquefied petroleum gas; (G) hydrogen; (H) coal derived liquid fuels; (I) fuels (except alcohol) derived from biological materials; (J) electric ity (including electricity from solar energy); and (K) any other fuel the Secretary of Tran sportation prescribes by regulation that is not substantially petroleum and that would yield substantial energy security and environmental benefits.” 38 49 U.S.C. 32901(a)(9), (c). 39 49 U.S.C. 32908(b)(3). 40 49 U.S.C. 32901(a)(11). 41 49 U.S.C. 32908(c). 42 Id. 43 71 FR 77915, Dec. 27, 2006.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 24 of 339 The 2007 passage of the Energy Independen ce and Security Act (EISA) amended EPCA by introducing additional new vehicle labeling requirements, to be implemented by the National Highway Traffic Safety Administration (NHTSA). 44 While EPA retained responsibility for establishing test methods and calculation procedures for determining the fuel economy estimates of automobiles for the purpose of posting fuel economy information on labels and in an annual Fuel Economy Guide, NHTSA gained responsibility for requiring automobiles to be labeled with additional performance metrics and rating systems to help consumer s compare vehicles to one another more easily at the point of purchase. Specifically, and for purposes of this rulemaking, subsection “(g) Consumer Information” was added to 49 U.S.C. 32908. Subs ection (g), in relevant part, directed the Secretary of Transportation (by delegation, the NHTSA Administra tor) to “develop and implement by rule a program to require manufacturers – (A) to label new automobiles sold in the United States with – (i) information reflecting an auto mobile’s performance on the basis of criteria that the [EPA] Administrator shall develop, not later than 18 months after the date of the of the Ten-in-Ten Fuel Economy Act, to reflect fuel economy and greenhouse gas and other emissions over the useful life of the automobile: (ii) a rating system that would make it easy for consumers to compare the fuel economy and greenhouse gas and other emissions of automobiles at the point of pur chase, including a designation of automobiles— (I) with the lowest greenhouse gas emissions over the useful life of th e vehicles; and (II) the highest fuel economy...” Thus, both EPA and NHTSA have authority over labeling requirements related to fuel economy and environmental informati on under EPCA and EISA, respectively. In order to implement that authority in the most coordinated and efficient way, the agencies are jointly proposing the revi sed labels presented below. II. Proposed Revisions to the Fuel Ec onomy Label Content (Metrics and Rating Systems) This section discusses th e elements that the agencies are proposing for the fuel economy label. Section A discusses the rang e of options considered and proposed for “conventional” petroleum-fueled vehicles (i.e ., those powered solely by gasoline or diesel fuel). Current hybrid vehicles, which ar e fundamentally gasoline-fueled vehicles, 45 will continue to use the same label as other gasoli ne vehicles, just as they do today. Many of the approaches discussed in Section A, such as the rating systems, will apply across all

44 P.L. 110-140. 45 Current hybrid vehicles obtain their electric power from their onboard conventional gasoline engine and energy captured through regenerative braking. T hus, the vehicle’s energy source is still gasoline.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 25 of 339 vehicles, including advanced technology vehicl es. Section B speci fically discusses the special cases of advanced technology vehicles. These vehicles – such as electric vehicles (EVs) and plug-in gasoline-elect ric hybrid vehicles (PHEVs) 46 – are one of the key reasons we are proposing new regulations. The agencies are concerned that current label requirements do not adequately address these vehicles, and we are seeking to develop labels that are useful and understandable to consumers, as well as equitable across the range of different vehicles and technologica l approaches. Section C addresses some of the less common fuels and fuel combinations for which label templates must ultimately be developed, such as compresse d natural gas and methanol. A. Conventional Gasoline, Di esel and Hybrid Vehicles The com plete effect of this proposal w ould be a single new label, which replaces the existing fuel economy label and which cont ains more information than is currently displayed, even in the case of conventional pe troleum-fueled vehicles. An example of the current label is shown here to provid e a basis for comparison with the proposed labels.

The new single label is the result of EPA and NHTSA’s decision that it is good public policy to consolidate label requirement s called for by EPCA and EISA. This label would contain information not only on a new vehicle’s fuel econom y, annual fuel cost, and range of fuel economy within class, but also, for the first time, information on a new vehicle’s fuel consumption, emissions, and comparative rating information, as required by statute. This expansion of the role of the label beyond fuel economy information reflects the new EISA requirements, which ar e premised on the concept that greenhouse gas and other environmental informati on is also in the public interest.

46 Definitions for hybrid electric vehi cles, electric vehicles, fuel cell ve hicles, and plug-in hybrid electric vehicles can be found in EPA regulations at 40 CFR 86.1803-01.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 26 of 339 In developing this proposal, the agencies came up with two distinct approaches for conveying information on the label. While both approaches rely on the same underlying data and both meet EPCA and EISA requirements, they differ in how they present and emphasize the information. One approach is more traditional, focusing primarily on MPG values and secondarily on annual fuel cost, but adding new elements, such as environmental information. A label using this approach would look familiar to the public, with a style simila r to the existing label. Requiring a label based on the traditional approach assumes that potential vehicle purchasers will use the information that is most meaningful to them, whether that is MPG, fuel cost, or other values. For example, participants in the focus groups lead ing up to this proposal indicated that, when considering the current fuel economy label, nearly all used the city and highway MPG values almost exclusively, despite the presen ce of other data elements on the label; some also used annual fuel cost and within-class comparison information. 47 The other approach uses the same data, but shifts the emphasis to a single, more prominent value that reflects fuel consum ption and its counterpart, greenhouse gas emissions, using a format the consumers wi ll easily recognize - a letter grade. The associated numerical values and other required elements would remain on the label, but with much less prominence. This approach makes it simpler for the consumer to identify those vehicles that use less oil and have a lesser environmental imp act and more clearly expands the role of the label beyond fuel economy information. Many of the focus group participants indicated that they trusted the EPA to determine which of these factors were important, and the agencies believe that consumers might be more likely to consider a vehicle with higher fuel econom y and lesser environmental impact if they were provided with a simpler label. 48 The agencies believe each approach has merit and that the public will be wellserved by having both be fully considered; therefore, EPA and NHTSA are co-proposing two label designs based on these two appro aches, without either being the primary proposal. NHTSA and EPA expect that comments will provide valuable insight on these two proposed label designs, and seek comme nt on the merits and drawbacks of each, recognizing that the label desi gn ultimately finalized may draw on elements from all the labels presented in this proposal. The labels are presented in Section III. Label designs 1 and 2 are co-proposed, with Label 1 being the letter grade approach and Label 2 being the more traditional approach. Label 3, on which comment is also sought, is an alternative version of the trad itional approach. The subsections that follow describe each of the data elements presented on the labels, how the agencies considered them , and how we are proposing that they be displayed on each of the co-proposed labels.

47 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010,,,p. 10. 48 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 36.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 27 of 339 1. Fuel Economy Performance Since 1977, the EPA fuel economy label has represented the fuel economy performance of a vehicle with estimates of city and highway m iles per gallon (MPG). With more than 30 years of consumers seeing these estimates as the most prominent values displayed on the fuel economy labels , it is not surprising that the consumer research conducted as part of this rulemaking has revealed a strong attachment to city and highway MPG values. A combined city and highway MPG value was first placed on the label starting with model year 2008 -- as part of the graphic showing the combined MPG value of the vehicle compared with other vehicles in the same class 49 but, even prior to this, the combined MPG value has always been a key input to estimating the annual fuel cost value requi red on the label. 50 Representing the vehicle’s fuel econo my performance on the label with an estimate of miles per gallon is a core el ement of the fuel economy information requirements of EPCA, which specifically states that the label must display “the fuel economy of the automobile” and defines “fue l economy” as “the average number of miles travelled...for each gallon of gasoline..” 51 In addition, EPA and NHTSA have determined that continuing to display the fu el economy values on the label would also meet the new requirements put in place by EI SA that call for a label “reflecting an automobile’s performance [based on criter ia determined by EPA] to reflect fuel economy...over the useful life of the vehicle.” 52 Because vehicle fuel economy depends primarily on fundamental vehicle design charact eristics that do not change over time, the agencies believe that fuel economy remains essentially stable throughout the life of properly-maintained vehicles. Thus the agen cies believe that the current test methods that determine label values for new vehi cles will meet the EISA requirements by providing reasonable estimates of fuel economy performance fo r the full useful life of a vehicle. Finally, consumers have shown a strong familiarity with and preference for MPG values, and have consisten tly indicated that these values are used as part of the vehicle purchase decision. For these reasons, the agencies are propos ing to continue to provide mile per gallon estimates to consumers, but with some changes relative to the current label, and with markedly different approaches on the two co-proposed labels. The agencies recognize that the focus gr oup research suggested that consumers have a strong familiarity with and prefer ence for the city and highway fuel economy values 53 (although this preference was much stronge r for conventional vehicles than for

49 The vehicle classes are defined in EPA regulations at 40 CFR 600.315-08 and provide a basis for comparing a vehicle’s fuel economy to that of other ve hicles in its class as required by statute. See the discussion in section VI.C for a detailed discussion of the vehicle class structure. 50 Combined fuel economy is a harmonic average of the City and Highway MPG values, with the City value weighted 55% and the Highway value weighted 45%. See 71 FR 77904, December 27, 2006. 51 49 U.S.C. 32908(b)(1)(A). 52 49 U.S.C. 32908(g)(1)(A)(i). 53 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 10.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 28 of 339 advanced technology vehicles; in those cases perhaps the complexity of the labels encouraged them to part with some of the numbers on the label). Focus group participants who argued strongl y for separate city and highw ay MPG values on the label often stated, for example, that most of their driving is either city or highway, and that a combined city-highway MPG value might make it harder for them to determine what MPG they should reasonably expect for that vehicle. 54 The agencies believe that this apparent preference was formed in large part because of EPA’s decision to present these as the dominant figures on the label for decades, not because consumers demanded these metrics 33 years ago. Had EPA been presenting the combined number as the dominant figure on the label since 1977, we mi ght expect to see a great deal of familiarity with and understanding of that particular value today. However, the distinction between city and highway driving does not address the ke y variables that could impact energy consumption for alternative technologies, su ch as ambient temperature. Thus, the agencies believe that, for labeling purposes, the city/highway dis tinction may be a less relevant metric than in the past. Thus with Label 1, NHTSA and EPA propose that the MPG values be significantly reduced in prominence (i.e., sma ller font and “below the fold” location on the label), with the letter grade rating a ssuming the predominant role. Given space constraints and the amount of information that is required to be pr ovided on the label, continuing to display MPG estimates with the same or similar prominence would be likely unnecessary and possibly untenable. The city and highway MPG values would be available for those who wish to use them, but the rating assumes the key role of informing the public about th e relative energy use and carbon emissions of a vehicle. The agencies believe that this de-emphasis on MPG values would have two primary benefits: first, the rating’s predominance should encourage consumers to use it rather than the specific MPG values to compare ac ross vehicle technology t ypes (particularly as MPG values become less meaningful for vehicl es that do not run, or only partially run, on fuels dispensed by the gallon); and second, to address the non-lin earity of MPG with respect to energy use, emissions, and cost, discussed further in Section II A 2, which becomes more important as signi ficantly higher mileage vehicles are poised to enter the marketplace. The agencies are proposing a different approach for Label 2, in which the combined MPG value is displayed prominentl y, with separate city and highway values continuing to be shown on the label, but as subordinate values. This approach focuses attention on MPG since it is the metric that consumers are the most familiar with and have come to utilize on the label. However, it downplays the separa te city and highway value in favor of a single, combined MPG, because the agencies believe that continuing to highlight multiple pieces of fuel ec onomy information with the same level of prominence could make it more difficult for c onsumers to compare vehicles, particularly across technology types, where MPG become s a less meaningful metric. A similar approach is taken on Label 3.

54 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 10.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 29 of 339 The agencies seek comment generally on th ese two approaches to displaying fuel economy performance information on the labels. Specifically, comment is sought on whether or not the labels that emphasi ze combined city/highway MPG values over separate city and highway MPG values are helpful to consumers, and why or why not. If combined MPG is preferred, comment is s ought on whether or not city and highway values should continue to be displayed, and why or why not. 2. Fuel Consumption While miles per gallon is statutorily ma ndated for fuel economy labels and has appeared on the label for severa l decades, the agencies have some concern that it can be a potentially misleading comparativ e tool for consumers, particularly when it is used as a proxy for fuel costs. The problem can be easily illustrated by the following figure, which shows the non-linear relations hip between gallons used over a given distance and miles per gallon. It can be seen that the differen ce in gallons it takes to go 1,000 miles between 10 and 15 MPG (about 33 gallons) is substantially greater than the difference in gallons it takes to go the same distance between 30 and 35 MPG (about 5 gallons). In other words, even if consumers clearly understand that hi gher MPG is better, thos e comparing vehicles with relatively low MPG values may not know that MPG differences that appear to be small, even one or two MPG, may actually ha ve very different fuel consumption values, and that selecting the slightly higher MPG vehicle could actu ally result in significantly less fuel used, thus saving a considerable amount of money. Fuel consumption numbers, unlike MPG, relate directly to the amount of fuel used. Mathematically, they represent gallon per mile, instead of miles per gallon. No t coincidentally, they also relate directly to the amount of CO 2 emitted, because the grams of CO 2 produced are directly proportional to gallons of fuel combusted.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 30 of 339 Illustration of "MPG Illusion"

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

0 5 10 15 20 25 30 35 40 45 50 Miles per GallonGallons per 1,000 Miles

33 gals

5 gals

This so-called “MPG illusion,” which ha s been widely written about by a number of economists to illustrate why MPG is a fl awed measure of how a vehicle’s efficiency relates to fuel costs, 55 was raised as an issue during the development of the 2006 fuel economy labeling rule. Some ve hicle manufacturers suggested at the time that it may be more meaningful to express fuel efficiency in terms of consumption (e.g., gallons per mile or per 100 miles) rather than in terms of economy (miles per gallon). 56 Fuel consumption is the primary metric used in Europe, and the Canadian fuel economy labels report both MPG and a consumption metric (l iters per 100 kilometers). Because a few stakeholders expressed an interest in a fuel consumption metric at the time, EPA requested comments on a gallons-per-mile metr ic and how it could be best used and presented publicly, such as whether it should be included in the Fuel Economy Guide. The comments received in response to this request were mixed. Public Citizen, on the one hand, responded that, while there may be some merit to including a fuel consumption metric, consumers are comfortabl e with MPG. Any change, they argued, should be carefully deliberated and invol ve a massive public outreach campaign to

55 Allcott, H., Mullainathan, S., "Energy: Behavior and Energy Policy," Science, March 5, 2010, available at:http://www.sciencemag.org/cgi/content/summary/327/5970/1204; Larrick, R.L., Soll, J.B., "The MPG Illusion," Science, June 20, 2008, available at h ttp://www.sciencemag.org/cgi/content/full/320/5883/1593; McArdle, M., "Department of Mathem atical Illusion," The Atlantic, December 24, 2007, available at: http://www.theatlantic.com/business/archive/2007/12/department-of-mathematical-illusion/2425/. 56 US EPA Response to Comments: Fuel Economy Labeling of Motor Vehicles, EPA-420-R-06-016, Dec 2006, pp. 60-61.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 31 of 339 educate consumers. 57 They also suggested that the es timated annual fuel cost provides information derived from consumption va lues and is thus a suitable proxy for consumption. Toyota, in contrast, commen ted that fuel consumption is a more meaningful measure than MPG for expre ssing fuel efficiency, while acknowledging EPA’s statutory limitations. They noted - as have many others - that the MPG metric is fundamentally nonlinear in relation to issues of consumer interest , such as cost of fuel or gallons used, and noted that anecdotal evid ence shows that the nonlinear aspects of MPG can lead to consumer confusion. Toyota conc luded that “...this is a matter on which the EPA is obligated to educate th e public as fuel consumption, not fuel economy, is a direct reflection of the environmental impact of vehicles in use.” 58 EPA responded to these comments in th e 2006 final rule by concluding that switching to a consumption metric without a long-term consumer education program would cause confusion and that, absent C ongressional action, the fuel economy labels would still have to continue to report MPG. EPA also agreed with commenters that the estimated annual fuel cost was a consumption- based metric which conveys essentially the same information (although the estimated annual fuel cost on the label is not without its own limitations, as described below). To allow further consideration of this issue, the consumer focus groups conducted for this rulemaking were asked to specifically explore the MPG illusion. Most participants were unconvinced that consumption should be included on the label with primary prominence and, although many were unopposed to having it as additional information, it was unclear whether it w ould add value from their perspective. 59 This was the case regardless of the consumption me tric tested, ranging from gallons per 100 miles to annual gallons consumed. However, there is general interest from a number of parties in the inclusion of a fuel consumption metric on the label. The ag encies, as well, believe that it is important to introduce the concept of cons umption to enable consumers to more accurately consider fuel use and costs during the vehicle purchase process. Thus, the agencies propose to introduce such a metric along w ith the MPG values, expecting that, over time, and with some education, consumers will begin to understand energy consumption and the direct connection it has with the fuel costs and envi ronmental impacts of the vehicle. EPA is therefore proposing to include an estimate of gallons per 100 mile s on the label under its 49 U.S.C. 32908(b)(1)(F) author ity to require other informa tion related to fuel economy on the label, and requests comment on doing so, as well as on alternative options for reflecting fuel consumption, such as annual gallons consumed. 60 For consumers to use a

57 Public Citizen Comments on Proposed Fuel Economy Labeling Of Motor Vehicles, EPA-HQ-OAR2005-0169-0123.1, Apr 3, 2006, p.4. 58 Toyota Motor Corporation Comments on Proposed Fuel Economy Labeling Of Motor Vehicles, EPAHQ-OAR-2005-0169-0118.1, Mar 31, 2006, p.7. 59 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 17. 60 This proposal is being made under EPA’s authority to require other information related to fuel economy on the label, as described in 49 U.S.C. 32908(b)(1)(F).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 32 of 339 consumption number, however, EPA and NHTSA believe that a comprehensive education campaign would have to accomp any the roll-out of new labels. The agencies also seek comment on the specifics of displa ying a consumption metric on the two labels be ing co-proposed. Although the label may provide city and highway MPG values as well as a combined city/highway MPG, we are proposing to require only the combined city/highway consum ption value on the label. The agencies are concerned that requiring a consumpti on value corresponding to every MPG value would lead to an undesirable prolifer ation of numbers on the label. 3. Greenhouse Gas Performance In addition to the fuel economy performance information that has been provided on the labels since 1977, Congress directed NHTSA, through EISA, to require new vehicles to also be labeled with informa tion reflecting their greenhouse gas performance, which would be determined on the basis of cr iteria provided by EPA to NHTSA. As with fuel economy, the GHG performance information would be per vehicle model type. EPA hereby proposes the criteria for determini ng greenhouse gas performance, addressing the greenhouse gases to be incorporated, the emissi ons sources to include , the underlying test procedures, and the specific metric to be us ed. The agencies seek comment on whether these criteria, as described below, are reas onable and appropriate for determining the greenhouse gas performance of new vehicles. For purposes of this NPRM, NHTSA is proposing that the greenhouse gas performance element of the label be based on these criteria. These same greenhouse gas performan ce values would also be used as the basis for the proposed greenhouse gas rating systems. With regard to the greenhouse gases to be covered, the agencies propose that the label include greenhouse gas performance information solely on the basis of carbon dioxide (CO 2 ) emissions, which typically constitute approximately 95% of the tailpipe emissions of greenhouse gases. Including emission levels of the greenhouse gases methane (CH 4 ) and nitrous oxide (N 2 O) along with CO 2 would not provide additional differentiation between vehicles. This is be cause, for purposes of compliance with EPA’s GHG standards beginning in model year 2012, CH 4 and N 2 O values would be based on emission factors–that is, set values applie d to each vehicle, rather than direct measurements. Because these va lues would be set at the same level for all vehicles, the agencies do not believe that including them would provide consumers with additional useful information. Similarly, the agencies propose that the greenhouse gas information be based on CO 2 emissions for the vehicle model type, rather than the ca rbon-related exhaust emissions (CREE) methodology used to determ ine fuel consumption for CAFE programs and compliance with the light duty greenhouse gas requirements. The use of CREE adds a level of complexity that, wh ile useful for compliance purposes, may not be beneficial to public understanding of the relative differen ces in GHG emissions between vehicles because the levels of other carbon-re lated emissions are low relative to CO 2 emissions. Although the agencies propose that the greenhou se gas information on the label be basedFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 33 of 339 only on CO 2 , we also seek comment on whether and, if so, how, the other greenhouse gases and carbon-related emissions should be included. Regarding the underlying test procedures to be used to determine the vehiclespecific GHG performance information for the labels, the agencies propose that the CO 2 values presented on the label be based on the fi ve-cycle test procedures that are currently utilized for fuel economy labeling purposes. 61 These test procedures measure rates of tailpipe CO 2 and other emissions, which form the basis of the fuel economy values currently used for vehicle labe ling. The five-cycle test proc edures have been used for labeling since model year 2008, and have sign ificantly improved the correlation between label values for MPG and those seen in actua l use. Manufacturers could thus calculate CO 2 emission rates using the same approach that they use for label fuel economy values, which the agencies know to be well-correlated with actual performance in use. More specifically, if a manufacturer uses the "derived five cycle" method for determining MPG for fuel economy labeling, they would use the same method for determining CO 2 for labeling purposes. The city and highway CO 2 emissions test results would then be used in the derived five-cycle equations, which th e EPA has converted from a MPG basis to a CO 2 basis for this purpose. Similarly, vehicle model types that are using the "full five cycle" method for fuel economy labeling would use the CO 2 results from those tests for purposes of fuel economy labeling. The agencies are therefore proposing that manufacturers use the same five-methodol ogy currently utilized for fuel economy labeling purposes for determining GHG valu es for purposes of the new label. As far as emission sources to include, NHTSA and EPA propose that the greenhouse gas emissions represented on th e label include only vehicle tailpipe emissions, 62 and do not account for any GHG emissions generated upstream of the vehicle. This approach is also consiste nt with the vehicle GHG emissions compliance levels recently adopted by EPA, which treat GHG emissions for electric operation as zero up to a cumulative production cap per manufacturer. 63 When exploring this issue with focu s groups, the agencies found that most participants did not consider the issue of upstream emissions either way. A few raised it when they noted that an electric vehicle indicated zero emissions, and suggested that these vehicles did cause some emissions at the power plant, which should be represented on the label. 64 On further discussion, they gene rally determined that it would be challenging for the label to meaningfully re present the range of emissions from power plants operated on different fuels, and sugge sted that this information was obtainable

61 40 CFR part 600.210-08. 62 The agencies seek comment on the potential incl usion of GHG emissions reflecting from A/C leakage credits, as described later in this section. 63 EPA placed a cumulative production cap on the total production of EVs, PHEVs, and FCVs for which an individual manufacturer can claim the zero grams/mile compliance value during model years 2012-2016. The cumulative production cap will be 200,000 vehicles, except that those manufacturers that sell at least 25,000 EVs, PHEVs, and FCVs in MY 2012 will have a cap of 300,000 vehicles for MY 2012-2016. See 75 FR 25436 (May 7, 2010) 64 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p.42.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 34 of 339 from other sources. 65 Given space constraints and th e difficulty of explaining the potential range of upstream emissions due to di fferent fuel sources, pa rticipants tended to agree that this issue could be adequately addressed by a statement on the label indicating that the CO 2 values on the label represented vehi cle tailpipe emissions only. The label designs presented in this NPRM include the words “Tailpipe Only” next to the CO 2 value presented; the agencies seek comment on whether this wording will be readily and uniformly understood to mean that upstream GHG emissions are not being reflected on the label, or whether other, more direct wo rding might be clearer and more helpful to consumers. Aside from tailpipe CO 2 , the agencies are not proposing, but seek comment on the inclusion of an additional factor in the GHG performance used for labeling: air conditioning (A/C) credits ge nerated by a manufacturer unde r the light duty vehicle GHG requirements. Air conditioning (A/C) systems contribute to GHG emissions in two ways. Hydrofluorocarbon (HFC) refrigerants, which are powerful GHGs, can leak from the A/C system (direct A/C emissions). Operation of the A/C system also places an additional load on the engine, which results in additional CO 2 tailpipe emissions (indirect A/C related emissions). The efficiency-relatedA/C impacts are accounted for in the fivecycle tests utilized for fuel economy labeli ng and proposed as the basis for GHG labeling purposes. However, EPA and NHTSA are c onsidering whether allowing manufacturers that generate credits towards their GHG compliance obligation by reducing A/C leakagerelated GHGs should be allowed to factor these credits into the CO 2 value displayed on the label and used as the basis for the GHG ra ting. Allowing manufact urers to factor A/C credits into the GHG performance metric on th e label would reward them for making A/C leakage improvements, but it would also cau se the GHG performance value and the fuel economy performance value to diverge, and would impact the methodology for any rating system that combines GHGs and fuel economy. Because A/C-related reductions are not “tailpipe,” including leakage improve ments in the tailpipe emissions could be misleading and inaccurate. If the final label includes other non-tailpipe emissions, the agencies may consider incorporating A/C leakage improvements. EPA and NHTSA seek comment on a number of issues: whether incl uding A/C leakage adjustments would lead to widening the gap between what is on the label and what consumers get in the real world; whether and, if so, how, to allow th e use of A/C credits for the purposes of labeling, with specific focus on the methodology and how the labels might display the inclusion of A/C leakage credits if the agencies decided to allow their use. EPA and NHTSA are proposing to use grams per mile as the metric to display greenhouse gas performance information on the la bel, which would be consistent with the metric used for GHG emission standards and compliance for light duty vehicles. The agencies believe that this metric is also consistent with requirements in 49 U.S.C. 32908(g)(1)(A) that performance reflect em issions “over the us eful life of the automobile.” As with fuel economy, the agencies do not at this time expect notable deterioration of greenhouse gas emissions levels over a vehicle’s useful life. However, the agencies seek comment on alternativ e approaches to convey GHG performance

65 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p. 42.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 35 of 339 information, such as tons per year, using an a pproach parallel to that discussed in section II for annual cost information. 4. Fuel Economy and Greenhouse Gas Rating Systems EISA requires that the label include a “r ating system that would make it easy for consumers to compare the fuel economy and greenhouse gas and other emissions of automobiles at the point of purchase, includ ing a designation of the automobiles with the lowest greenhouse gas emissions over the useful life of the vehicles, and the highest fuel economy....” 66 The two co-proposed label designs present two variations on ratings systems for fuel economy and greenhouse gas em issions, based on two interpretations of the statutory language. These two approach es - separate absolute ratings for fuel economy and greenhouse gases, and a relative ra ting that combines the two factors - are not mutually exclusive, and a la bel could contain one or both. In developing rating systems, the agencies are cognizant of the focus group testing conducted for this proposal, in which it appeared that many participants did not rely on any rating system. Perhaps due to their familiarity with the prominently displayed MPG numbers, many participants re lied initially and sometimes exclusively on MPG or MPGe label values to co mpare vehicles to one another. 67 Given this result, the agencies are proposing two different approaches to the ratings. The first approach is displayed at the bo ttom of Label 1 and Label 2: separate ratings scales for fuel economy and greenhouse gas emissions, bounded by specific values for the “best” and the “worst” vehicl es, and with specific fuel economy and GHG emissions values for the vehicle model type in question identified in the appropriate location on the scale. The scales on Label 2 are essentially larger versions of those on Label 1, with the addition of a within-class indicator on the fuel economy scale to meet the EPCA 68 requirement for comparison across comparable vehicles. This variation - absolute ra ting scales - directly utilizes the actual fuel economy and CO 2 performance values per vehicle model type to define the rating, which the agencies believe has both potential benefits and drawbacks. The agencies believe that, by rating vehicles on an absolute scale, this a pproach clearly meets th e text of the EISA requirement for providing fuel economy and GHG performance information and indicating highest fuel economy and lowest GHG vehicles. The rating system allows the consumer looking at the label on the dealer’s lot to identify precisely the highest and lowest fuel economy values available, th e lowest and highest GHG emissions values available, and where the vehicle bearing the label falls in relation to these extremes. When this variation was presented in focus groups, some participants liked the level of detail provided by absolute rating scales and found it he lpful in understanding how a

66 49 U.S.C. 32908(g)(1)(A)(ii). 67 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p. 36. 68 49 U.S.C. 32908(b)(1)(C).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 36 of 339 vehicle compared to the “best” and “worst” ve hicles available, although others found it to be more detail than they wanted or did not pay attention to this information on the label. 69 However, even for those consumers w ho appreciate this level of detail in comparing vehicles by fuel economy and GHG emi ssions, there is the po ssibility that the “best” will change over the course of the model year and that the MPG or gram/mile value at the end of the scale may no longer be ac curate. Highest and lowest values to be used on the scale would be provided to manuf acturers by EPA prior to the start of the model year via annual guidance. Because these values will be based on the previous model year plus any additional information regarding the upcoming new sales fleet available to the EPA, they are expected to be relatively accurate. However, because they are projected values, the intr oduction during the m odel year of any new and unexpected vehicles not previously identified to EPA c ould potentially cause in accuracy in the end points of the rating scales. In general, becau se of the expected introduction of electric vehicles, which have no tailpipe CO 2 emissions and thus anchor one end of the scale at zero, and because of the expecta tion that, for the foreseeable future, one or more vehicles will anchor the opposite end at a relatively cons tant level, the agencies believe that the end points will likely remain relatively constant, but they may not remain exactly constant. The agencies ther efore seek comment on how si gnificant this potential for inaccuracy could be on consumers’ ability to use the absolute rating scales to compare fuel economy and GHG emissions across vehicl es, and on whether commenters believe the labels would have to be revised in orde r to meet the statutory requirement every time a new “best” vehicle was introduced if th ey were not accommodated by the end points. The second approach to a rating system is also displayed on Label 1: a combined rating scale for fuel economy a nd GHG emissions, shown in the form of a letter grade. Because vehicles that are low in CO 2 emissions have inherently good fuel economy (and vice versa), and because CO 2 emissions are the primary determinant of fuel economy using EPA test procedures, ve hicles would generally tend to have the same “score” for fuel economy as for GHG emissions. Thus, if the ratings are equivalent, as a practical matter, it would be consistent with the st atutory requirement to provide a single, combined rating system. The proposed letter grade scale would ra nge from A+ to D, including plus and minus designations to provide more opportunitie s for improvement. All vehicles would receive a “passing” grade - that is, the rati ngs would not include an “E” or “F” grade - because all vehicles must meet CAA requirements in order to be sold, and the agencies do not wish to convey otherwise. Additionall y, the “A+” vehicles - with associated text stating the range of letter gr ades - will indicate which vehicles are the “best,” thus, meeting the requirement that the label de signate highest fuel economy and lowest greenhouse gas vehicles. This variation of a fuel economy and gr eenhouse gas rating system was suggested by the expert panel and was not presen ted in focus groups, but many focus group

69 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p. 41.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 37 of 339 participants favored the simplification of in formation presented when possible, and the agencies believe that such a well-known rating approach will be immediately recognizable by the majority of consumers. The agencies are also hopeful that a rating system as simple as a letter grade may en courage consumers to rely more on the rating system itself in making purchasing decisions, rather than on, for example, MPG numbers, which are subject to the “MPG illusion” issue discussed above. A letter grade allows vehicles purchasers to make a comparative assessment among vehicles with different grades, consolid ating information so that consumers might more easily assess the GHG emissions and fuel economy of different vehicles and make fully informed decisions. The agencies al so request comment on whether any vehicle should receive a grade of A+ or whether this might lead to mistaken consumer conclusion that the vehicle has no ener gy or environmental impacts. As noted above, CO 2 emissions are directly measured by EPA and form the basis for calculating the fuel efficien cy of the vehicle; using CO 2 as the basis for the rating is the most direct methodological approach and will avoid any rounding discrepancies that could occur from converting to MPG and then to fuel consumption. It also avoids the need to adjust the MPG thresholds by fuel type to account for differences in the energy content of fuel. Utilizing CO 2 as the controlling factor in the rating thresholds is a practical consideration and is not meant to imply that GHG emissions are more important than energy use; both are relevant consider ations and are viewed by the agencies as equally important unde r the rating system. 70 The agencies propose to base this rati ng system approach on the range of CO 2 emissions for the projected fleet, placing the middle of the rating scale at the combined 5- cycle CO 2 emissions rate for the median vehicle, 71 with equal-sized increments of CO 2 assigned to each grade or rating. 72 The higher-GHG end of the scale would therefore be twice the CO 2 emissions rate of the median va lue, although, effectively, any vehicle

70 The direct relationship between CO 2 and fuel consumption breaks down to some extent for vehicles with electric operation. For these vehicles, tailpipe CO 2 emissions are zero; however, energy is consumed by the vehicle and an energy effici ency value other than infinity can be assigned. Nevertheless, given that electric drive trains are currently much more efficient than those for conventiona l vehicles, the relationship between those vehicles emitting zero CO 2 and having the highest energy efficiency holds true at the present time. This approach may need to reasse ssed in the future if efficiencies of electric drive and conventional vehicles begin to approach each other, or if it is de sired to differentiate between the efficiencies of electricpowered vehicles, but should not be a necessary consideration in the foreseeable future. 71 Median vehicle is determined by vehicle model type, with model type as defined in 40 CFR 600.002-08. 72 The agencies evaluated several potential methodologies for creating this rating system besides equal increments of CO 2 . We rejected an approach that would cr eate the rating system based on establishing equal size categories for the ratings using miles per gallon – that is, taking the range of MPG of the vehicle fleet and dividing that range into ten equal segments . Given that the fleet will soon see vehicles that achieve MPG-equivalent values of 75 to 100, the agencies were concerned that this methodology would create a situation where a vehicle such as the 2010 Toyota Prius (which gets a combined MPG of 50 MPG) would receive only an average rating. Using this me thod would result in the vast majority of vehicles receiving a rating well below the middle rating, which would not seem to be an appropriate result of a rating system. However, the agencies seek comment on whether a combined rating system based on MPG instead of on CO 2 might be developed in a way that avoided these results.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 38 of 339 higher than this level would also receive the lowest rating. Under such an approach, the median value would become more stringe nt over time as a result of GHG emissions requirements and, thus, the entire scale woul d shift toward lower GHG levels. Unless a vehicle model reduced its rate of CO 2 emissions across the model years, its ratings would gradually drop over time. This approach woul d be consistent with both the evolution of fuel economy and emission requirements, and th e public expectation th at products evolve over time. The CO 2 thresholds associated with each rating would be determined on an annual basis and provided through guidance in advance of the model year. EPA would require that manufacturers use th e ratings from the prior year if they are in a position to need to label a vehicle before the annual guidance has been issued. The agencies recognize that revising the median baseline vehi cle each year may lead to some consumer confusion, but this dilemma is no different than what consumers currently encounter when they view identical vehicles from differe nt model years and their associated annual fuel cost or the comparative fuel economy slider bar for each vehicle displayed on today’s label. The agencies continue to beli eve that the underlying assumptions need to be up-to-date to be most useful to consum ers. Nevertheless, the agencies request comment on what the agencies might do to avoid potential confusion. The following example is based on model y ear 2010 data and assumes that one or more vehicles that emit zero CO 2 tailpipe emissions ( i.e. , electric or fuel cell vehicles) have entered the market. Gasoline-equivalent MPG values are provided in the table for clarity. However, the agencies propose that the CO 2 values be controlling for purposes of assigning the rating.

Table II.A.4-1 Example Fuel Economy and Gr eenhouse Gas Rating System CO 2 Range (grams per mile) Rating Combined gasoline MPG or MPGe 0-76 A+ 117 and higher 77-152 A 59-116 153-229 A- 40-58 230-305 B+ 30-39 306-382 B 24-29 383-458 B- 20-23 459-535 C+ 18-19 536-611 C 16-17 612-688 C- 14-15 689-764 D+ 13 765-842 and higher D 12 and lowerFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 39 of 339 This example would result in the following distributions of ratings, based on 2010 vehicle model types, plus several additional vehicles indicated as “Electric Vehicle” and “Plug-in Hybrid Electric Vehicle.” 73

Applying this rating system to model year 2010 data would assign the ratings as follows for the sample vehicles listed. Of course, future model year vehicles could receive different ratings from those shown in this example.

CO 2 g/mi MPGe Sample Vehicles

A+ 0-76 117 and up Electric Vehicle

73 The additional vehicles are examples of types expected to enter the commercial market. The CO 2 and MPGe values shown are examples only and are not based on any formal testing or certification data.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 40 of 339 A 77-152 59-116 Plug-In Hybrid Electric Vehicle

A- 153- 229 40-58 Ford Fusion Hybrid, Honda Civic Hybrid, Toyota Prius

B+ 230- 305 30-39 Chevrolet Cobalt (Manual), Ford Escape Hybrid (2WD), Honda Fit, Nissan Altima Hybrid, Toyota Camry Hybrid, Toyota Corolla (1.8L Manual), Toyota Yaris, Volkswagen Golf B 306- 382 24-29 Chevrolet Cobalt (Automatic), Chevrolet Malibu (2.4L), Ford Escape (2.5L Manual), Ford Escape Hybrid (4WD), Ford Focus, Ford Fusion (2.5L), Ford Range r (2.3L Manual), Honda Accord (2.4L), Honda Civic, Honda CR- V (2WD), Hyundai Elantra, Hyundai Sonata (2.4L), Jeep Pa triot (2.0L, 2.4L Manual), Mazda 3, Nissan Altima (2.5L), Nissan Sentra, Porsche Boxster (Automatic), Toyota Camry (2.5L), Toyota Corolla (1.8L Automatic, 2.4L), Toyota Highla nder Hybrid, Toyota Matrix, Toyota RAV4 (2.5L) B- 383- 458 20-23 Cadillac CTS (3.0/3.6L, Automatic), Chevrolet Impala, Chevrolet Malibu (3.5L and 3.6L), Chevrolet Silverado 15 Hybrid, Chevrolet Tahoe 1500 Hybr id, Dodge Charger (2.7/3.5L with 4-speed Automatic), Dodge Grand Caravan (4.0L), Ford Escape (2.5L Automatic), Ford Fusion (3.5L), Ford Mustang (4.0L Manual), Ford Ranger (2.3L Automatic), GMC Canyon (2.9L), GMC Sierra 15 Hybrid, Honda Accord (3.5L), Honda CR-V (4WD), Hyundai Sonata (3.3L), Hyundai Santa Fe, Jeep Patriot (2.4L CVT), Nissan Altima (3.5L), Porsche Boxster (Manual), Subaru Forester, Toyota 4Runner (2.7L), Toyota Camry (3.5L), Toyota Highlander (2WD), Toyota RAV4 (3.5L), Toyota Tacoma (2.7L 2WD) C+ 459- 535 18-19 BMW 750Li (4.4L 2WD), Cad illac CTS (3.0/3.6L, Manual), Chevrolet Corvette (6.2L Auto matic, 7.0L), Chevrolet Express 1500 (4.3L), Chevrolet Silverado 15 (4.3L 2WD, 5.3L), Chevrolet Tahoe 1500, Dodge Charger (3.5/5.7L with 5-speed Automatic), Dodge Grand Carava n (3.3L, 3.8L), Ford Explorer (4.6L 2WD), Ford F150 (2WD 6-speed Automatic), Ford Mustang(4.0L Automatic, 4.6L, 5.4L), Ford Ranger (4.0L Automatic), GMC Canyon (3.7L, 5.3L 2WD), GMC Sierra 15 (4.3L 2WD, 5.3L), Honda Pilot, Jaguar XJ, Jeep Grand Cherokee (3.7L), Kia Sedona, Toyota 4Runne r (4.0L), Toyota Highlander (4WD), Toyota Sienna, Toyot a Tacoma (2.7L 4WD, 4.0L Automatic), Toyota Tundra (4.6L 2WD) C 536- 611 16-17 BMW 750Li (4.4L 4WD, 6.0L 2WD), Cadillac CTS (6.2L, Manual), Chevrolet Corvette ( 6.2L Manual), Chevrolet ExpressFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 41 of 339 1500 (5.3L), Chevrolet Silverado 15 (4.3L 4WD, 4.8L, 6.3L 2WD), Dodge Charger (6.1L), Ford Explorer (4.0L and 4.6L 4WD), Ford F150 (4-speed Automatic, 4WD 6-speed automatic), GMC Canyon (5.3L 4WD), GMC Si erra 15 (4.3L 4WD, 4.8L, 6.2L), Jeep Grand Cherokee (5.7L ), Nissan Titan (2WD), Toyota Tacoma (4.0L Manual), Toyota T undra (4.0L, 4.6L 4WD, 5.7L 2WD) C- 612- 688 14-15 Aston Martin DBS, BMW M5, Cadillac CTS (6.2L, Automatic), Chevrolet Silverado 15 (6.3L 4WD), GMC Sierra 15 (6.2L 4WD), Land Rover Range Rover, Lexus LX 570, Maserati Quattroporte, Nissan Titan (4WD ), Toyota Tundra (5.7L 4WD) D+ 689- 764 13 Ferrari 599 GTB Fiorano, Me rcedes-Benz Maybach 57

D 765 and up 12 and down Ferrari 612 Scaglietti

One potential issue with this approa ch is that a rating system based on CO 2 emissions may not be an adequate proxy for a fuel economy rating system if the agencies decide in the final rule to allow manufactur ers to use A/C credits in determining their CO 2 emissions values. Since fuel econo my by definition does not account for HFC leakage, a CO 2 rating boosted by A/C leakage credits would not accurately represent the vehicle’s fuel economy rating. EISA requires th at labels include a rating system that allows consumers to compare fuel economy across vehicles, so a fuel economy rating system that includes HFC leakage arguably would not meet these requirements. The proposed Label 1 would address this issue, wh ether A/C were include d in the letter-grade rating or not, by virtue of also having the absolute rating scale for fuel economy at the bottom of the label. Still, the agencies seek comment on whether a rating system that combined fuel economy and CO 2 emissions could accurately de scribe both if A/C credits were permitted to be included in the rating system for CO 2 . Another issue with using a CO 2 -based method is the fact th at some diesel vehicles would see their rating reduced by 1⁄2 letter grade – i.e. , diesel vehicles would appear “worse” to the consumer in the rating system – relative to an approach that relied on MPG or fuel consumption, given the higher ca rbon content of a gallon of diesel fuel compared to a gallon of gasoline. This coul d potentially discourage some sales of diesel vehicles if consumers are influenced by th e rating system, which the agencies may not necessarily want to accomplish. However, beca use a consistent basis is needed across all fuels, MPGe would need to be used rather than MPG: this woul d provide equivalency on an energy basis rather than a volume basis, and would allow the use of an MPG-type metric across fuels that are not dispensed by the gallon, such as CNG and electricity. Since gasoline, diesel, biodiesel , and ethanol have nearly equi valent ratios of energy to carbon, the choice of MPGe versus CO 2 /mile has minimal impact on the rating system results, particularly for liquid fuels. Th e agencies nevertheless seek comment on howFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 42 of 339 significantly a CO 2 -based rating system might impact diesel sales, and whether an MPGe-based rating system might ameliorate an y such impact, and if so, how that rating system would need to be structur ed for technology neutrality. In practical terms, this means that the ra ting system would include all vehicles for which fuel economy information and labeling is required, which currently includes all passenger automobiles and light trucks as defined by NHTSA at 49 CFR Part 523. More specifically, the rating syst em would span all automobiles up to 8,500 pounds gross vehicle weight, plus some vehicles (large SUVs and some passenger vans) between 8,500 and 10,000 pounds gross vehicle weight. We believe that this is consiste nt with the intent of Congress, based on the text of EISA which refers clearly to labels for “automobiles” rather than “passenger” or “non-passenger automobiles,” and which states that the rating system must include a designation of the ve hicle with the highest fuel economy and lowest GHG emissions. 74 The approach of including a ll vehicles in a single rating system is supported by the market research a nd literature reviews done for this proposal, which show that, while prospective vehicl e purchasers narrow their choices by vehicle type early in the buying decision, they do not fo cus narrowly on a single class, at least as defined by EPA. Focus group participants indi cated that they shopped, on average, across two to three vehicle classes. 75 For these consumers, a single rating system will enable them to make accurate vehicle comparisons across whichever vehicles they choose to shop. Market research also indicates that co nsumers have varying definitions of what constitutes a specific vehicle class, thus maki ng it challenging to categorize vehicles in a way that is useful for all consumers. Nevertheless, EPA is seeking comment on rating passenger cars separately from light duty trucks under its authority to require other information related to fuel economy as authorized by the Administrator at 49 U.S.C. 32908(b)(1)(F). 76 In this case, EPA would propose to use the same definitions for cars and trucks used for light-duty fuel economy and GHG standards, which are NHTSA’s definitions provided in 49 CFR Part 523. Doing so would be consistent with au tomaker obligations under those requirements, in which cars and trucks have separate sets of standards. Additionally, market research shows that, while many people shop across seve ral narrowly-defined classes, about twothirds shop exclusively among eith er trucks or cars. These consumers might find it useful to compare among only those vehicles of interest . If a commenter believes that separate rating systems for cars and trucks would be preferable, EPA especially seeks comment on whether those consumers that shop among both cars and trucks could adequately compare across their vehicles of intere st if ratings systems were se parated, and whether or not the

74 49 U.S.C. 32908 (g)(1)(A)(ii). 75 Environmental Protection Agency Fuel Economy Label: Pre-Focus Groups Online Survey Report, EPA420-R-10-907, August 2010, p. 18. 76 NHTSA does not interpret 49 U.S.C. 32908(g)(1)(A)( ii) as permitting rating systems based on less than the entire fleet, so a rating system for fuel economy and/or GHG emissions based on only the car or truck fleet would not be sufficient to satisfy EISA’s requ irement, although EPA c ould require such a rating system under its authority.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 43 of 339 emerging “crossover” market will make this “car/truck” distinc tion increasingly less relevant and potentially confusing to the public. 77 5. Other Emissions Performance and Rating System In addition to fuel economy and gree nhouse gas information and ratings, EISA requires new vehicles to al so be labeled with inform ation reflecting a vehicle’s performance in terms of “other emissions,” and a rating system that would make it easy for consumers to compare the other emissions of automobiles at the point of purchase. 78 Unlike fuel economy and GHG emissions, EI SA does not expressly require the designation of the “best” vehicl e in terms of other emissions. This section lays out the criteria that EPA proposes NHTSA use to form the basis for other emissions performance and ratings. Concurrently, NHTSA proposes th at these criteria be used as the foundation for information that is provided on the label. Congress did not precisely de fine in EISA which of th e pollutants in the universe of possible candidates for “other emissions” should be included for labeling purposes. The agencies assume that Congress did not intend to create any new substantive requirements as part of this labeling provi sion for pollutants that are not currently regulated and, thus, propose that “other emi ssions” include those ta ilpipe emissions, other than CO 2 , for which vehicles are required to meet current emission standards. These air pollutants comprise both criteria emissions regulated under EPA's National Ambient Air Quality Standards and air toxics, and include:

• NMOG—non-methane organic gases;

• NOx—oxides of nitrogen;

• PM—particulate matter;

• CO—carbon monoxide; and

• HCHO—formaldehyde. Auto manufacturers must provide the ag ency with emission rates of these pollutants for all new light duty vehicles each model year un der EPA’s Tier 2 light duty vehicle emissions standards requirements, 79 or the parallel requirements for those vehicles certified instead to th e California emissions standards. 80 Emission standards for these pollutants are aggregated into bins; each bin contains emissions limits on a gram per mile basis for each of the aforementioned pollutants for the useful life of the vehicle, as shown in Table II.A.5-1. To be eligible for sale in the United States, each vehicle

77 For example, under NHTSA’s and EPA’s definitions, the same version of a crossover could potentially be a “car” if it were two wheel drive and a “truck” if it were four wheel drive. A consumer looking at the labels of these two vehicles side by side might find it challenging to understand why their ratings were different. 78 49 U.S.C. 32908(g)(1)(A). 79 40 CFR part 86, subpart S. 80 42 U.S.C. 7543(b), Clean Air Act Section 209, gi ves California special author ity to enact stricter air pollution standards for motor vehicles than the federal government’s, as long as under certain requirements are met. 42 U.S.C. 7507, Clean Air Act Section 17 7, allows states, under certain conditions, to adopt California’s vehicle emission standards. See 40 CFR 86.1844-01.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 44 of 339 model and configuration must be certified to a specific bin, meaning that the automaker is confirming that the vehicle is designed not to exceed the specified emission rates for any of the pollutants over the useful life of the vehicles. Automakers must submit data to EPA that demonstrates compliance with these levels, with a requirement that their fleet achieve a sales-weighted NOx average equivalent to the Bin 5 st andard or cleaner annually. California and states that have a dopted California emissi ons standards in lieu of the federal standards have similar sets of emissions standards, known as the Low Emitting Vehicle II (LEV II) standards. 81

Table II.A.5-1 US EPA Light Duty Tier 2 Emission Standards Emission Limits at Full Useful Life (120,000 miles) for Model Year 2004 and Later Light Duty Vehicles, Light Duty Trucks, and Medium Duty Passenger Vehicles NOx (g/mi) NMOG (g/mi) CO (g/mi) PM (g/mi) HCHO (g/mi) Bin 1 0 0 0 0 0 Bin 2 0.02 0.01 2.1 0.01 0.004 Bin 3 0.03 0.055 2.1 0.01 0.011 Bin 4 0.04 0.07 2.1 0.01 0.011 Bin 5 0.07 0.09 4.2 0.01 0.018 Bin 6 0.1 0.09 4.2 0.01 0.018 Bin 7 0.15 0.09 4.2 0.02 0.018 Bin 8 0.2 0.125 4.2 0.02 0.018 The agencies considered whether to provi de specific information and ratings for each of these individual pollutants listed above. EPA Tier 2 emission regulations do require manufacturers to submit specific info rmation regarding the performance of each vehicle for each of these pollutants, but the ag encies believe that attempting to require all of it to be represented on the fuel econo my label, along with rating systems for each, would be unduly burdensome and not reasonable given space constraints and the need to present all the other information required by EPCA and EISA. In addition, in the focus groups conducted fo r this proposal, consumers’ interest in actual emissions levels across multiple pollutants was minimal, and this level of detail is likely to be well beyond that which most me mbers of the public would seek or find useful. 82 Repeatedly, focus group participants reflected that it was the job of the government to determine the relative importa nce of the pollutants, and that the label should not leave this determination up to the i ndividual. Given that EISA did not specify exactly which pollutants would make up “other emissions” and given focus group

81 The California Low-Emission Vehicle Regulations for Passenger Cars, Light-Duty Trucks and MediumDuty Vehicles, Title 13, California Code of Regulations (last amended March 29, 2010). 82 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 29.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 45 of 339 feedback that differentiation between ot her emissions did not add value for many participants, the agencies are not proposing to provide pollutant-specific information on the label for “other emissions. Neverthele ss, the agencies seek comment on whether pollutant-specific information and ratings might have value to consumers beyond what the agencies have seen in their focus group research, and if so, how the agencies might design a label to require pollu tant-specific information and ratings that would make it easy for consumers to compare other pollutant emissions across vehicl es at the point of purchase. Instead, the agencies believe that a rating based on the groups of emissions standards--either the Federal Tier 2 bin sy stem or the California LEV II system, as appropriate—can and should be used to meet this requirement. This approach mirrors the current Air Pollution Score on EPA’s Green Vehicle Guide ( www.epa.gov/greenvehicle ). Vehicle certification under eith er the Federal Tier 2 bin syst em or the California LEV II system allows auto manufacturers to certify that their vehicles will fall into an emissions range across each of the regulated pollutant s. In effect, the Federal and California systems rate vehicles according to thei r air pollution emissions by compiling the requirements across multiple pollutants into one category (a Tier 2 bin or a LEV II standard). Though these systems are useful fo r regulatory compliance, they have limited recognition among consumers. However, re lative rating systems are well-recognized by the public, and the Federal emissions bins a nd California standards categories are wellsuited to conversion to a relative rating system that would be readily understandable. EPA and NHTSA therefore propose to es tablish a rating system for “other emissions” in which each rating is associat ed with a bin from the Federal Tier 2 emissions standards (or comparable Califor nia emissions standard). Table II.A.5-2 provides an example of how such a system would work for a ten-point rating scale. 83 Various graphical representations of this ra ting are being contemplat ed, as discussed in Section III.

83 Under EPA regulations, Independent Commercial Im porters (ICIs) are allowed to import a limited number of older vehicles that can be certified to the em ission standards which were in effect at the time the vehicle was produced. In some cases, these standard s may be pre-Tier 2 standards. Because the rating system being proposed for other pollutants on the FE label is based on the Tier 2 bin structure, we are proposing that vehicles imported by ICIs that are not subject to the Tier 2 standards will automatically be rated as a "1" (i.e., the rating assigned to vehicles with the worst emissions under the Tier 2 bin structure).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 46 of 339 Table II.A.5-2 Proposed Rating System for Other Emissions

Rating EPA Tier 2 Emissions Standard California Air Resources Board LEV II Emissions Standard 10 Bin 1 ZEV 9 N/A PZEV 8 Bin 2 SULEV II 7 Bin 3 N/A 6 Bin 4 ULEV II 5 Bin 5 LEV II 4 Bin 6 LEV II opt 1 3 Bin 7 N/A 2 Bin 8 SULEV II large trucks 1 N/A ULEV & LEV II large trucks

Because such a rating would be directly reflective of the emissions standards requirements for air pollutants to which the ve hicle is certified, the agencies believe that it could serve the dual purposes of performance information and ratings for “other emissions” as required by 49 U.S.C. 32908(g)(1 )(A)(i) and (A)(ii). Such an approach would have the advantage of avoiding requi ring detailed information on the label that would detract from the key elements and could be of minimal use to the majority of the public. NHTSA and EPA seek comment on whet her also utilizing th e rating system to meet the requirement for performance information on other emissions would be permissible under EISA. 6. Overall Energy and Environmental Rating One of the issues that came up frequen tly in the focus groups conducted for this proposal was how to design a label that balan ced the competing inte rests of completeness and simplicity. It became clear that differe nt consumers wanted different amounts of information and levels of detail about fuel economy, GHG emissions, and other emissions, and how vehicles compare to one another. Many focus group participants expressed an interest in most or all of th e information that might be offered, until they saw that the label they had “designed” would be cluttered and difficu lt to read; at this point, many culled their desired informati on down to a few key elements. Other participants simply were not interested in much detail. Yet other participants insisted that they wanted more detail anyway and woul d not find labels with more information distracting or confusing. 84

84 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 29.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 47 of 339 One approach that emerged to condense th e level of detail was to combine rating systems: for example, a rating system that combined fuel economy and CO 2 emissions, or that combined CO 2 and other pollutant emissions, or that combined all three. Because they have different sets of un its and different scales, rating systems that combine different data elements must employ relative or unit-fr ee scales, such as th e letter grade system, rather than absolute approaches like the sepa rate rating scales disc ussed above. Using the bar as an example, if CO 2 and other pollutants were combin ed into a single bar, a vehicle that falls at one point between the absolute end points for CO 2 emissions may not fall at the same point between the (different) end points for other emissions, which would make combining the ratings challenging at best, a nd unhelpful at worst. Similarly, while a vehicle may fall at roughly the same point be tween “best” and “worst” absolute values for both fuel economy and CO 2 emissions, differences in scale make presenting that visually difficult and pos sibly factually incorrect. Thus, if the agencies wanted to try to combine rating systems for visual simplicity and to appeal to consumers who want labels with less information, a relative scale – 1 to 10, 1 to 5, A+ to D – is needed. The agenci es tested combined relative scales for GHG and other pollutant emissions fairly extensivel y in the focus groups, with mixed results. When environmental ratings were shown in th e context of the label, the preference was for a consolidated environmental rating, with participants expressing minimal interest in having separate information on greenhouse gase s and other air pollutant emissions; these participants often stated that the EPA was in a better position to assess the relative concerns regarding the various environmen tal factors than were the participants themselves. 85 In contrast, however, when the en vironmental rating approaches were shown in isolation, apart from the context of the entire label, many participants indicated a preference for two separate ratings, arguing th at more complete information holds more value. 86 Congress required in EISA that each new ve hicle must be labeled with a “rating system that would make it easy for cons umers to compare the fuel economy and greenhouse gases and other emissions of automo biles at the point of purchase, including a designation of automobiles with the lowest GHG emissions over the useful life of the vehicles; and the highest fuel economy . . . .” Thus, for purposes of meeting the statute, the question is whether a rating that combined two or all three elements could accurately reflect which vehicle achiev es the lowest GHG and the hi ghest fuel economy. For purposes of meeting consumers’ needs in a la bel, the question is how to design a label that is helpful both to the people who want more information and detail and to the people who want less information and detail. Gi ven the EPCA requirements for fuel economy and annual cost information, and the EISA requirements for performance information on fuel economy, greenhouse gases, and other emissi ons, the agencies believe that the needs for more detail-oriented consumers w ill likely be adequately met.

85 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 25. 86 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p. 39.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 48 of 339 In the previous section we discussed an approach to combining fuel economy and CO 2 into one overall rating; in this section the agencies discuss the additional option of also combining “other emissions” with either CO 2 or with a combined fuel economy/CO 2 rating. EPA and NHTSA recognize that ther e is not a strong correlation between CO 2 and other emissions, due to sophisticated emi ssion control systems, such as catalytic converters and exhaust gas recirculation, whic h target reductions of specific pollutants but do not also reduce CO 2 emissions. In addition, the agen cies are cognizant of the very real challenges automakers must overcome to achieve the required emissions levels and do not wish to deprive them of public r ecognition of advancements in reducing air pollutants that could come w ith a separate rating system for pollutants. Moreover, a separate rating would provide information fo r purchasers who value low emission levels and an opportunity to raise awareness among ot her consumers of which vehicles produce lower emissions. And finally, as discussed a bove, the agencies have determined that a rating for “other emissions” also meets th e EISA requirement of providing vehicle performance information for those emissi ons. Combining this rating for “other emissions” with ratings for fuel economy and greenhouse gases would potentially be at odds with this requirement. For these reasons, the agencies propose that the rating for “other emissions” be separate from the rati ng(s) for fuel economy and greenhouse gases. Nevertheless, while some focus group participants wanted more information, most clearly wanted less and suggested that they would glean little additional value from a label with separate ratings. The agencies seek comment on whether it would be more useful to provide a single rating that capt ures all three elements: fuel economy, greenhouse gases, and other emissions. As a matter of technical appropriateness, although there is not a strong corr elation between emissions of CO 2 and emission of other pollutants, there is some correlation. The vehi cles with the lowest fuel economy levels and highest CO 2 emissions do not typically meet th e cleaner emission bins; conversely, those with high fuel economy and low CO 2 emissions are rarely, if ever, certified to the higher emission bins. Including other emissions in the rating system to form one rating would simplify for the consumer the overall energy and enviro nmental impact of using the vehicle, thus reducing their need to weigh the relative impor tance of the various elements. It also allows the label to be less cluttered and more streamlined. Therefore, it is possible and perhaps r easonable to combine “other emissions” with the fuel economy/CO 2 letter grade approach. Unde r this approach, the rating for fuel economy and greenhouse gases applicable to a vehicle would be adjusted upward or downward, based on the Federal emissions bi n (or California sta ndard) to which the vehicle is certified. That is, vehicles that are certified to the cleanest bins would have their rating increased—for example, under a letter grade system, a Bin 2 vehicle otherwise eligible for a B+ would have their rating increased to an A-. Table II.A.6-1 illustrates how such a system could work

.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 49 of 339 Table II.A.6-1 Potential Comprehensive Rating Fuel Economy/ Greenhouse Gas Rating Overall Energy and Environment Rating Bin 1, 2, 3 Bin 4, 5 Bin 6, 7, 8 A+ A+ A+ A A A+ A AA- A A- B+ B+ A- B+ BB B+ B BB- B B- C+ C+ B- C+ CC C+ C CC- C C- D+ D+ C- D+ D D D+ D D-

7. Indicating Highest Fuel Ec onom y/Lowest Greenhouse Vehicles In addition to ratings indicating relati ve emissions performance, EISA also requires the rating system to include “a designation of au tomobiles with the lowest greenhouse gas emissions over the useful life of the vehicles; and the highest fuel economy.” Depending on the rating system(s) selected, differing approaches may be needed to achieve this requirement. For exam ple, if the fuel economy and greenhouse gas ratings are provided separately, such as with the absolute bars shown on labels 1 and 2, consumers would be able to easily iden tify the highest fuel economy and lowest greenhouse gas emitting vehicles by looking for those that have the highest absolute values. If fuel economy and greenhouse gase s are combined into one rating, such as with the letter grade system, but are provide d separately from other emissions, again consumers should be able to easily iden tify the highest fuel economy/lowest GHG vehicles by looking for those that achieve th e best rating category. However, this will likely encompass more models than would be designated “best” under an absolute rating system, which may or may not have been the in tent of EISA. In that instance, the rating system itself meets the requirement for desi gnation of lowest GHG automobiles, defined in that case as the group of vehicles that achieve the best rating category. If, on the other hand, fuel economy and greenhouse gases are combined with other emissions into a comprehensive rating, and no other information on the label indicates the highest fuel economy/lowest GHG vehicles, then the rating system would need to be adjusted in order to ensure that EISA requirements were met. The agencies seek comment on whether separate ratings s hould be provided for other emissions orFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 50 of 339 whether a single combined rating for fuel ec onomy, GHG and other emissions should be provided. 8. SmartWay Logo EPA and NHTSA additionally seek comment on utilizing the SmartWay logo as an indicator of a high level of overall environmental perf ormance. The SmartWay Logo appears as follows:

The SmartWay logo could be added to the label as a way of highlighting the top environmental performers each model year. Th is approach is contemplated for labels 2 and 3. The trademarked SmartWay designati on was launched in 2005 on the EPA’s Green Vehicle Guide website ( www.epa.gov/greenvehicle ) to provide consumers with a quick and easy way to determine which vehicles were the cleanest a nd most fuel efficient for each model year. It has been awarded to those vehicle models that achieve certain thresholds on the Greenhouse Gas score (which is tied to the vehicle’s fuel economy and fuel type) and the Air Pollution score (which is tied to the Tier 2 bins or California standards, as applicable). Historically, the SmartWay thresholds determined by EPA have been targeted to approximately the top 20% of vehicle models each model year, and have been tightened over time as the fleet has become cleaner and more fuel efficient. The SmartWay logo for light duty vehicles is currently being used on a voluntary basis by auto manufacturers, vehi cle-search web sites, rental car companies, banks/credits unions (green vehicle loan programs), and private companies (light duty commercial fleets and employee incentive programs). Th e SmartWay logo was included on labels shown to focus group participants for this rulemaking. Although pa rticipants did not recognize the logo, most readily understood th at they could use it when shopping for vehicles to quickly identify those that were environmentally frie ndly, without having to review the rest of the envir onmental information on the label. 87 Because focus groups have indicated that some consumers prefer more detailed information while others prefer a simpler pr esentation, the agencies are seeking comment on whether to require or optionally allow th e SmartWay logo on the label for applicable vehicles. This logo would indicate in a bi nary fashion, similar to other eco-labels, whether \ a vehicle meets certain environmen tal and energy use thresholds. Specifically, the agencies seek comment on whether includi ng the SmartWay logo would be helpful to consumers on a label that already addresses fuel economy, GHGs, and other emissions in other formats.

87 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p. 41.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 51 of 339 9. Annual Fuel Cost EPCA requires the estimated annual fuel co st be displayed on the fuel economy label. 88 Prior to 2008, the label simply displa yed the estimated annual cost with no explanatory information. EPA’s consumer research in 2006 found that consumers paid little attention to this metric, and the r eason most frequently stated was that the assumptions behind the estimate (annual mile s and fuel price) were unknown to them. 89 As a result, the 2008 label modifications incl uded a requirement th at these assumptions be placed on the label. 90 EPA publishes annual guidance directing manufacturers what fuel price to use for determining annua l cost—based on projections made by the Department of Energy 91 --so that all vehicles in a gi ven model year use the same assumptions. The estimated annual fuel cost can therefore be used to compare across vehicles of the same model year. As an ex ample, the estimated annual fuel cost to be used for labels on model year 2008 gasoline-fueled vehicles is $2.80. Despite the addition to the label of the assumptions behind the annual fuel cost starting in 2008, the early fo cus groups conducted in 2010 show ed that many participants still did not pay much attenti on to the estimated annual fuel cost metric. Participants often stated that this was because fuel prices fluctuate and, therefore, they did not think that the fuel price assumption stated on th e label reflected what they were actually paying. Less frequently, particip ants additionally said that the fact that they did not drive 15,000 miles a year made the estim ated annual cost not meaningful to them. Participants remained skeptical of the use of estimated annual fuel cost even when asked to consider whether it could be a useful comparative metr ic across other vehicles of the same model year. In retrospect, it is possible that pr oviding this information on the label about the assumptions behind the annual fuel cost number resolved one issue and caused others, in that now there are two more numbers for the consumer to process a nd question. There is also the possibility that consumers are not aware that the two assumptions are used universally across all vehicl es, which would call into que stion the usefulness of the metric as a comparative tool at the point of purchase (for exam ple, if they believe that the manufacturers individually determine the inpu ts to the estimated annual fuel cost). However, participants in the Phase 3 focus groups leading up to this NPRM consistently employed the annual fuel cost information (a long with MPG) when asked to compare the fuel efficiency of advanced technology vehicles like PHEVs and EVs with conventional vehicles, with their more comp licated set of energy metrics. 92 Recognizing the EPCA statutory requiremen t to continue to display the estimated annual fuel cost, EPA requests comment on ho w to improve consumers’ understanding of

88 49 U.S.C. 32908(b)(1)(B). 89 PRR, Inc., EPA Fuel Economy Label Focus Groups: Report of Findings, prepared for U.S. Environmental Protection Agency, March 2005. 90 40 CFR 600.307-08. 91 The Department of Energy’s Energy Information Administration publishes gasoline and diesel fuel price forecasts at least annually in its A nnual Energy Outlook , available at http://www.eia.doe.gov/oiaf/aeo/index.html

. 92 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p.37.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 52 of 339 the estimated annual fuel cost, whether it is a useful comparative tool across technologies, and if so, how to best co mmunicate on the label that it is a valid comparative tool. EPA also requests commen t on whether there might be an additional way to display fuel cost information – or a better way of displaying the required information – that might be more useful or might have a greater impact on consumers. In the 2010 focus groups, some groups were presente d with a number of different ways of displaying fuel costs on the label, ranging in magnitude from dollars per mile to dollars per five years. 93 A fairly clear preference emerged for dollars per year, with dollars per month a frequent second choice. 94 EPA is thus proposing labels that continue to prominently display the estimated annual fuel cost and the associated assumptions. EPA is requesting comment on whether the label should include the estimated monthly fuel cost, or other alternative cost information. Commenters should bear in mind the statutory requirement that estimated annual fuel cost be on the label; thus any other cost would have to be an additional piece of information. 10. Relative Fuel Savings or Cost The expert panel recommended another approach to presenting fuel cost information—to focus on the savings attainab le by purchasing a more fuel efficient vehicle. These panelists felt strongly that sa vings is a much more powerful message than cost, which tends to be discounted, as just discussed. Although savings calculations would necessarily also rely on assumptions, th ey suggested that the value of savings to the consumer is significant enough to overcome these drawbacks, at l east for a substantial portion of the population. NHTSA and EP A therefore propose in cluding a five-year savings value on Label 1. No such value is proposed for Labels 2 or 3, although the agencies could also require savings informa tion on these labels, if one of them were finalized. The agencies explored a number of me thods for calculating savings. The most promising approach seems to be savings compared to the projected median vehicle for that model year, and the agencies propose th is method. Thus, some vehicles would show a savings, while others would show consum ers paying more for fuel over five years compared to a reference vehicle; these values would increase in magnitude the further the vehicle is in terms of fuel consumption fr om the reference value. This approach appropriately reflects that fuel cost savings become larger the more a vehicle improves their fuel economy, and conversely that vehicles cost more to fuel when fuel efficiency is decreased when compared to the reference, median, vehicle. As with the fuel economy and greenhouse ga s rating system and comparable class information, the EPA would provi de annual guidance indicating the value to be used as the reference against which the fuel cost savi ngs would be measured. The reference fiveyear fuel cost would be calculated by appl ying the gasoline fuel price to the average

Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 19. 94 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010, p. 19.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 53 of 339 miles driven over the first five years of the reference vehicl e’s life, assuming a particular fuel economy for the reference vehicle; thes e values would be provided in the annual guidance. We propose that the fuel economy va lue for the reference vehicle be based on the projected fuel economy value of the median vehicle model type for sale the previous model year, not sales-weighted, and adju sted based on projections regarding the upcoming model year. This value is expected to change slightly from one year to the next as the fleet becomes more fuel efficient in response to regulations and market forces. The guidance would also include the fuel prices to be used to calculate fuel cost savings for the particular vehicle, based on its appli cable fuel type. Finally, we propose to round the fuel cost savings values used on the labe l to the nearest one hundred dollars to avoid implying more precision than is warranted, as well as for ease of recall. As previously stated, vehicles with a hi gher fuel economy than the median vehicle would be designated as saving the consumer a certain number of dollars over a five year period. For those vehicles with fuel economy lower than the median vehicle, the label would state that the consumer would spend a certain number of dollars more over a five year period. Vehicles that are within fifty dollars of the reference vehicle fuel cost could be designated as saving zero dollars . Alternatively, text could i ndicate that th is vehicle is comparable to the average vehicle. Although the agencies recognize that “median” is a more accurate term than “average,” we propos e the use of the term ‘average” as being more readily understandable. Other methods considered include savings compared to the average vehicle one grade lower, and fuel cost savings comp ared to vehicles 10 MPG lower. These approaches had certain positive aspects, particul arly in that they demonstrated the value of incremental improvements in vehicle choi ce. In the main, however, they provided values that seemed to be difficult to interpre t and could perhaps cause perverse effects. For example, a vehicle at the high end of their grade or rating would have a higher savings value than a vehicle at the low end of their grad e or rating. This might be valuable for those who are considering vehicl es within the same grade. However, for those shoppers who glanced at the number quickly, they might erroneously conclude that, for instance, a vehicle at the low end of the B- grade would save less on fuel costs than a vehicle at the high end of the D+ grade. The agencies seek comment on this and alternative approaches, as oppos ed to the proposed approach of displaying a vehicle’s fuel cost savings relative to the median vehicl e in the fleet. The agencies are also seeking comment on whether there is a potential for consum er confusion caused by two different cost values displayed on Label 1 with rega rd to the estimated annual fuel cost of operating the vehicle and the 5 year fuel co st savings number compared to the average vehicle. We are interested in receiving comments on how consumers may perceive these values as interacting with each other and we intend to explore this issue further prior to finalizing this proposal, incl uding exploring research c onducted in executive branch agencies. 11. Range of Fuel Economy of Comparable VehiclesFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 54 of 339 EPCA requires that the label contain “the range of fuel economy of comparable automobiles of all manufacturers,” a require ment that the label addressed somewhat awkwardly for many years. 95 As a result of EPA’s 2006 labeling rule, the labels now use a graphical element to show the performance of the labeled vehicle relative to the best and worst within that vehicle class. 96 In the 2010 focus groups, it became clear that this information, though more prominently displaye d on today’s fuel economy label than in previous iterations of the labe l, continued to be under-utili zed by consumers as a tool to assist them in making vehi cle purchase decisions. EPA is now proposing two possible ways of meeting this statutory requirement. Given the likelihood of more information on th e label, a graphic as used on the current label that repeats the combined fuel econom y number may overly complicate the new label. Thus one option being proposed is simply a text statement that would read “Combined fuel economy for [insert vehicle class] ranges from XX to XX.” This approach is used on Labels 1 and 3. The ot her option EPA is proposing is essentially an updated version of the current graphical representation, which combines the fuel economy rating across all vehicles with the wi thin-class information into one graphical element, as shown in Sec tion III as part of Label 2. The agencies believe that one of these a pproaches could be used to satisfy the statutory requirements in 49 U.S.C. 32908(b)(1)(C) (“the range of fuel economy of comparable automobiles”). As an alternative, EPA seeks comment on whether the requirement to indicate fuel economy of comparable vehicles is met by the overall fuel economy rating required by 49 U.S.C. 32908(g)(1 )(A)(ii) (“a rating system that would make it easy to compare the fuel economy . . . of automobiles”), given that consumers tend to consider vehicles from severa l classes during their purchase process. 12. Other Label Text EPA is proposing some minor changes and an addition to the text on the label not previously discussed, and seeks commen t on each of these text changes. First, each of the proposed labels has info rmation that indicates the fuel on which the vehicle operates. The agencies believe it will become increasingly important, as different technologies emerge, to display clearly the kind of vehicle a consumer is viewing. For duel fuel vehicles (e.g., current gasoline/ethanol vehicles), EPA is required by statute to identify the vehicle as a dual fuel vehicle and to identify the fuels that the vehicle operates on. 97 In the case of current flexible-fue l vehicles, for example, this text would read “Dual Fuel: Gasoline-Ethanol (E85) ,” and for plug-in hybrid vehicles arriving soon on the market this text would read “Dua l Fuel: Gasoline-Electricity.” In addition, we are proposing the use of various icons on the label to distinguish between different

95 49 U.S.C. 32908(b)(1)(C). 96 40 CFR 600.307-08. A discussion of the compar able class categories and a proposed change to those categories can be found in section VI.B. 97 49 U.S.C. 32908(b)(3).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 55 of 339 technologies and between different operati ng modes. These icons include stylized electric plugs, fuel pumps, and fuel dispensing nozzles. Second, because of the expanded information on the label and DOT requirements under EISA, EPA is proposing to change the la bel heading from the current text (“EPA Fuel Economy Estimates”) to “EPA/DOT Fuel Economy & Environmental Comparisons.” We also propose adding the DOT logo to the label, to provide appropriate recognition of DOT’s role mandated by EISA. Third, EPA is proposing to change the Fuel Economy Guide statement found on the label to reflect the expanding features that comprise www.fueleconomy.gov , with the hope that this website will become the first Internet stop for a vehi cle’s fuel economy and environmental information. The proposed text would read: “Visit www.fueleconomy.gov to calculate estimates persona lized for your driving, and to download the Fuel economy Guide (a lso available at dealers).” EPCA requires EPA and the Department of Energy (DOE) to prepare and distribute to dealers a fu el economy booklet, commonly known as the annual “Fuel Economy Guide,” containing information that is “simple and readily understandable.” 98 EPCA requires that the guide include fuel economy and estimated annual fuel costs of operating automobiles manufactured in each model year, as well as some additional information for dual fueled automobiles (suc h as the fuel economy and driving range on both fuels). Further, EPCA requires that a statement appear on the fuel economy label that this booklet is available from dealers. 99 Starting in the 2008 model year, the statement on the label was broade ned to include a reference to www.fueleconomy.gov as another source for the Fuel Economy Guide; this website is based on the EPA fuel economy information and jointly run by EPA and DOE. Thus the current text now reads: “See the FREE Fuel Economy Guide at dealers or www.fueleconomy.gov .” Both the U.S. Department of Ener gy’s Office of Energy Efficiency and Renewable Energy and the EPA currently maintain www.fueleconomy.gov . The site helps fulfill DOE and EPA’s responsibility under EPCA of 1992 to provide accurate MPG information to consumers. The site provides fuel economy estimates, energy and environmental impact ratings, fuel-saving tips, as well as a downloadable version of the fuel economy guide and other useful inform ation. Since its inception in 1999 this website has been used by millions of consumers, and the latest data from 2008 indicates that more that 30 million user sessions occurred in that year. Because of the extensive amount of inform ation and user features available on the website beyond simply providing electronic access to the Fuel Economy Guide, the agencies wish to direct consumers to this we bsite when they are researching their vehicle purchases. For example, the website allows a user to personalize their fuel economy information by inputting their specif ic driving habits and fuel pr ices. This ability will be even more important for understanding the impacts of driving distance and battery

98 49 U.S.C. 32908(c)(1)(A). 99 49 U.S.C. 32908(b)(1)(D).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 56 of 339 charging habits on the fuel consumption of ve hicles like plug-in hybrid electric vehicles, and EPA expects to work with DOE to deve lop a web-based system to allow users to customize the fuel economy estimates for th ese advanced technology vehicles. Further, information that some consumers may want but that is not available on the label is likely to be available on the website. For example, in the 2010 focus groups some participants expressed an interest in knowi ng the cost to fill the tank, or the volume of the fuel tank, or how many miles could be driven on a tank. The website provides all this information, and information such as the miles per tank can be personalized to reflect a person’s relative amount of city and highway driving. Finally, the website also has developed a version tailored to mobile devices. During the expert panel, EPA provided th e panelists with a copy of the current Fuel Economy Guide. The panelists all e xpressed concerns that the public probably didn’t know it was available, didn ’t access it at the dealer showrooms if they did know it was available, and would not respond well to it in its current format. They recommended a simple one-sheet “guide” that dealers would distribute in the form of a checklist, that would allow EPA to deliver the top ten points on fuel economy that could not (and should not) be included on the label. It also would en sure that even if indi viduals did not utilize the website, they would receive this informati on. It was also suggested that if possible, distribution of this doc ument be mandatory. EPA requests comments on the usefulness of the Fuel Economy Guide in its current form and also requests comments on whether EPA and DOE should develop a different approach in the future to the Fu el Economy Guide -- including the idea of transforming the guide into a consumer friendly “checklist” guide. While EPA recognizes that it does not have the authorit y to mandate distribution of this guide by dealers we also request comments on how we could better encourage and work with dealers to more prominently display and distri bute the fuel economy guide in the future. The expert panel also strongly recommended that the new fuel economy label prominently display an easy to remember URL. Panelists suggested that not only should such a URL be easy to remember, it should also provide a consistent platform for educational messages that woul d be highly visible for consumers and serve as a portal for web users to engage each other on fuel economy issues, including exchanging helpful tips and tools. Panelists indicated that this type of URL and message platform is of critical importance in today’s marketplace a nd that EPA should make better use of the label to engage the public in this manner. Finally, the panelists recommended this new URL not be a '.gov' website, which they suggest ed is generally perc eived as static and uninviting by consumers that are increasingly reliant on highly interactive social media networks and tools. Label 1 series found in Section III currently displays how this URL concept might be incorporated in Label 1. We note that President Obama has an initiative on transparency and open government, 100 and as part of this initiative, the Executive Branch has already made some si gnificant improvements to its websites.

100 See Presidential Memorandum on Tran sparency and Open Government, available at http://www.whitehouse .gov/the_press_office/Tran sparency_and_Open_Govern ment/ (last accessed JulyFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 57 of 339 The agencies request comment on the new URL concept displayed on Label 1, along with the underlying approach recommende d by the expert panel: that the agencies create and display a prominent URL on the label that will provide both a visible consumer message and an easy to remember we b portal or gateway to a more interactive consumer website. As envisioned, this webs ite would introduce th e new label approach, laying out what is new and unique to this labe l. It would explain what the agencies are trying to accomplish with the new design, and detail the concept of the grading system and underlying scoring method. It would include applications that consumers can use to personalize their vehicle buying d ecisions, based on their own driving habits and needs. It would also provide informa tion that is not available on th e label, such as the upstream emissions associated with each vehicle choice. It would also link to the detailed vehicle information and consumer discussion pages on fueleconomy.gov, capitalizing on the existing government website and further ma ximizing its consumer friendliness and usability. Finally, for conventional vehicles, EPA is not proposing any changes to the statement that currently reads “Your act ual mileage will vary depending on how you drive and maintain your vehicle.” However, because some advanced technology vehicles are especially susceptible to certain conditions, such as cold weather, EPA is considering the addition of some specifi c qualifications to this statement for some vehicle technologies, and seeks comment on what qualif ications might be most helpful. 13. Gas Guzzler Tax Information EPCA requires that “Gas Guzzler” tax information be included on the fuel economy label. 101 These taxes are required under the Internal Revenue Code 26 U.S.C. 4064(c)(1). This part of the Internal Revenue Code contains the provisions governing the administration of the Gas Guzzler Tax, and speci fically contains the table of applicable taxes and defines which vehicles are subject to the taxes. The IRS code specifies that the fuel economy to be used to assess the am ount of tax will be the combined city and highway fuel economy as determined by using the procedures in place in 1975, or procedures that give comparable results (s imilar to EPCA’s requirements for determining CAFE for passenger automobiles). These pr ovisions have been codified in 40 CFR 600.513-08. This proposed rule would not impact these provisions. The current labeling requirements for the Ga s Guzzler Tax require that an affected vehicle have the following statement on the la bel (the regulations pr ovide different ways of displaying this depending on the label; for example, an alternative fuel vehicle label has some additional information that limits sp ace, thus the template for labeling such a vehicle accounts for this). In the limited situations in which this labeling requirement applies, EPA expects to provide label templates including this information that are consistent with the label design that is ultimately selected. For example, for Label 1

20, 2010); see also Open Government Directive from OMB, available at http://www.whitehouse.gov/omb/assets/memoranda_2010/m10-06.pdf (last accessed July 20, 2010). 101 49 U.S.C. 32908(b)(1)(E).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 58 of 339 presented in Section III, one potential option is to place the gas guzzler information in the position for fuel cost savings. EPA seeks comment on this approach. B. Advanced Technology Vehicle Labels 1. Introduction In the past, EPA has not devoted much e ffort to fuel economy label issues for advanced technology vehicles. There is a si mple reason for this – if EPA defines a conventional vehicle to be that which de rives all of its propulsive energy from a petroleum fuel (or a liquid fuel blend do minated by petroleum) stored on-board the vehicle, then conventional vehicles have represented well over 99% of all vehicles sold since the advent of fuel economy labels in the 1970s. EPA made the judgment that the very small number of consumers who might ha ve considered the purchase of an electric or natural gas or other type of advanced t echnology vehicle over th e last 35 years did not justify a major investment of government resources to address the more complex issues associated with advanced technology labels. Rather, EPA addressed the occasional need for an advanced technology vehicle label on a case-by-case basis. But, this situation is chan ging and as the market evol ves, this approach is no longer sufficient. For the first time since la bels have been in use (in fact for the first time since the early days of the automotive industry), it app ears increasingly likely that the future automotive marketplace will offer a much more diverse set of technological choices to consumers. EPA and NHTSA believe that now is the time to begin to design labels that are more appropriate for advanced technology vehicles that we expect to be commercialized in the next few years. For purposes of this rulemaking, the agencies intend to focus on two advanced technologies:

• Electric vehicles (EVs) are vehicles th at are powered exclusively by batteries (charged with electricity from the grid ) and electric motors, and which do not have a conventional internal combustion engine or any other powertrain. Several automakers sold EVs in the early and mid-1990s, 102 but the only EV on the U.S. market today is the luxury Tesla Roadst er with annual sales of a few hundred vehicles. The first more mainstream-priced EV offered for sale in the U.S. is the Nissan Leaf, for which orders are now being taken and first deliveries are projected for late this year in selected markets. 103 In addition, Ford has announced plans for a model year 2012 Ford Focus EV. 104

• Plug-in hybrid electric vehicles (PHEVs ) can be powered in as many as three different ways: 1) like an EV, exclusively by batteries and electric motors, 2) like

102 Ehsani,M., Gao,Y., and Einadi, A. (2010). Modern Electric, Hybrid Electric and Fuel Cell Vehicles: F Fundamentals, Theory, and Design. Second Edition. Pp 12-14. 103 “Nissan’s Electric Leaf Set for Pr oduction,” Detroit News. May 26, 2010, http://detnews.com/artic le/20100526/AUTO01/5260357, (last accessed May 26 , 2010). 104 Abuelsamid, Sam, “Detroit 2010: 2012 Focus Electric could be both sedan and hatch”, green.autoblog.com, Jan 11, 2010, available at: http://green.autoblog.com/2010/01/11/detroit-2010-2012- ford-focus-electric-coul d-be-both-sedan-and-h. (last accessed July 12 , 2010).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 59 of 339 a conventional hybrid vehicle, when the ve hicle gets all of its propulsive energy from a conventional internal combustion en gine/transmission (usually fueled with gasoline), though the battery st ill assists with regenerative braking and engine buffering, and 3) a combination of bot h conventional hybrid and electric operation. PHEVs entail a family of di fferent engineering approaches, and will continue to evolve as the technology ma tures. One distinct type of PHEV is called an extended range electric vehicl e (EREV). An EREV PHEV has a very distinct operational profile: as long as the battery is above its minimal charge level, the vehicle is operated exclusiv ely on the electric powertrain, and then when the battery is at its minimal char ge, it operates like a conventional hybrid getting all of its power from gasoline or other liquid fuel. In a way, an EREV PHEV can be considered to be a combin ation of an EV and a conventional hybrid, with an emphasis on operating like an EV as much as possible. There have been no commercial EREV PHEVs sold in the U.S. to date but the first commercial offering is likely to be the Chevrolet Volt, which is scheduled to be introduced in late 2010. 105 A second type of PHEV is calle d a “blended” PHEV. As long as the battery is charged, it will operate on a combination of grid electricity and gasoline (while a blended PH EV might not have any “ guaranteed” all-electric range, it is possible that so me blended PHEV designs may have some all-electric range under certain driving conditions), then when the battery is at its minimal charge, the vehicle gets all of its pro pulsive energy from the gasoline fuel and engine (though the battery still assists with regenerative braking and engine buffering, as with a conventiona l hybrid). In this respec t, a blended PHEV can be viewed as a combination of a “grid-e nhanced” hybrid and a conventional hybrid, but without the emphasis on using only elec tricity for shorter trips as with the EREV PHEV. To the degree that a blended PHEV does have some practical allelectric range, the boundary between a blended PHEV and an EREV PHEV begins to blur. There have been no or iginal equipment blended PHEV offerings in the U.S. to date, but many automake rs are developing pr ototypes and some aftermarket conversions are available. The first commercial U.S. blended PHEV may be a Toyota Prius, likely offered as a 2012 model. 106 Other advanced technology vehicles will also likely be on the market in the near future--for example, Honda continues to sell a dedicated compressed natural gas Civic in selected states and several manufacturers plan to sell fuel cell vehicles (FCVs) in the future. 107 In any case, the issues associated with and the de cisions that we make about

105 “Chevy Volt’s Rollout to Include New York City,”New York Times, July 1, 2010, http://wheels.blogs.nytimes.com/ 2010/07/01/chevy-volts-initial-roll out-to-include-new -york-city/. (last accessed July 12, 2010). 106 “Detroit 2010: Toyota’s 2011 plug-in Prius release date is “aggressive” target,” Green Autoblog, January 14, 2010, http://green.autoblog.com/2010/01/14/detroit-2010-toyotas-2011-plug-in-prius-releasedate-is-aggre

. (last accessed July 12, 2010). 107 “GM Plans Fuel-Cell Vehicle Pilot Program in Hawaii,” Environmental Leader, Energy & Environmental News for Business, May 12, 2010, http://www.environmentalleader.com/2010/05/12/gmplans-fuel-cell-vehicle- pilot-program-in-hawaii/ . (last accessed July 12, 2010).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 60 of 339 labels for EVs and PHEVs will go a long way to ward preparing us to address labels from other advanced technologies in the future. EPA and NHTSA seek comments on whether there are other advanced tec hnologies that have the potenti al to achieve mainstream interest in the near future and for which th e agencies should develop labels in a future rulemaking. PHEVs and EVs represent a fundamental departure from the powertrain and fueling infrastructure that has exclusively dominated the U.S. market for the last century—a single powertrain (an internal combustion engine with a mechanical transmission) and a single fuel (gasoline) available at public serv ice stations. While PHEVs retain this option, they also offer the consumer the option to charge the on-board battery from the electric grid at home and to propel the vehicle excl usively or partially by the battery and electric motor. An EV must be operated this way. These fundamentally different powertrains and refueling approach es raise many challenging issues from a consumer information standpoint that may affect how the agencies deci de to require these vehicles to be labeled.

• These technologies are still evolving. EPA has been able to test only a small number of these advanced technology ve hicles, and it is unclear whether the vehicles that we have tested are a good reflection of the technologies that will ultimately be offered in the market.

• Gasoline and electricity are very different automotive fuels. Gasoline is a liquid fuel with a high energy density that is st ored on-board the vehicle in a relatively simple and lightweight tank that can be f illed in a few minutes, while electricity is generated by chemical reactions inside a much lower energy density (and therefore heavier) battery pack and wh ich can take many hours to recharge. Gasoline is produced very efficiently from crude oil, but is a less efficient vehicle fuel, while electricity is less efficient to produce from a wide variety of resources (such as coal, nuclear, natural gas, hydr opower, and wind), but is a more efficient vehicle fuel. Approximately 80% of th e “life-cycle” greenhouse gas emissions from a gasoline vehicle are emitted directly from the vehicle tailpipe, while all of the life-cycle greenhouse gas emissions a ssociated with an electric vehicle are “upstream” of the vehicle. As just one simple example, miles per gallon, the core metric that has been used on gasoline labels for the last 35 years, is a much more complicated metric for a fuel like electr icity which is not measured in gallons.

• Some advanced technologies can oper ate on more than one fuel, either simultaneously (e.g., the use of gasoline a nd electricity in the charge depleting mode of a blended PHEV) or at diffe rent times (e.g., an EREV PHEV uses electricity in charge depleting mode, then gasoline in hybrid mode). By itself, this suggests that a consumer label for a vehicl e that operates on two fuels might have to have approximately twice as much information as a label for a vehicle that operates on a single fuel.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 61 of 339 • Consumer behavior can have a much la rger impact on the operation of an advanced technology vehicle, relative to th at of a conventional vehicle. Whether the owner of a PHEV charges the batter y every night and how many miles per day they drive—neither of which affect s average energy consumption for a conventional vehicle—can have a dramatic impact on energy and environmental performance. Again using the standard m iles per gallon of gasoline metric as an example, one EREV PHEV design may vary from 35 or 40 MPG on the low end (when the battery is empty and the vehi cle is in hybrid mode) to essentially “infinite” MPG-gasoline if the vehicle is operated only off the battery pack. This fuel economy variability is much greater than with conventional vehicles, where MPG values for most individual vehicles are typically within 15-20% of the average value.

• Consumers have no practical experience w ith these new technologies, or in some cases might not even understand the basics of how the technologies work. While EPA has sponsored focus groups to gauge what consumers want on advanced technology labels, there can be little que stion that consumers are in a stronger position to provide meaningful input on conventional labels , with which they have decades of experience, than on advanced technology labels, where they may not now know now what they will want and n eed to know in the future to make informed purchase decisions. All of these factors sugges t that there is the likeli hood of significant consumer confusion when multiple advanced technol ogy vehicles begin to compete in the marketplace. We have no illusions that our advanced technology labels will completely resolve this consumer confusion, but we do hope they will help to reduce the confusion. We are certain that advanced technology labels will be more complicated than conventional vehicle labels. Just as EPA has repeatedly refined the much simpler conventional vehicle labels over time, the ag encies expect to do so with advanced technology vehicle labels as well. A ccordingly, while EPA and NHTSA are coproposing two specific labels for EVs and PHEVs, the agencies also seek public comment on as many of the key issues as possible. While this section will discuss EVs a nd EREV PHEVs as well, in many cases blended PHEVs will be the illu strative technology because they often raise the most challenging issues due to the f act that two different fuels can be used simultaneously. 2. EPA Statutory Requirements a. Electric Vehicles (EVs) Electricity is an alternative fuel under the statute and vehi cles fueled only by alternative fuel are “d edicated automobiles.” 108 b. Plug-In Hybrid Electr ic Vehicles (PHEVs)

108 49 U.S.C. 32901(a)(1) and (a)(8).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 62 of 339 Some PHEVs are dual fueled automobiles under 49 U.S.C. 32901(a)(9). They are capable of operating on a mixture of electr icity and gasoline, pr ovide superior energy efficiency when operating on electricity comp ared to operating on gasoline, and provide superior efficiency when operating on a mixture of electricity and gasoline as when operating on gasoline. 109 These vehicles also meet the requirement that a dual fueled automobile must meet the minimum driving range under 49 U.S.C. 32901(c). 110 DOT has set the minimum driving range for electr ic vehicles at 7.5 miles on its nominal storage capacity of electricity when operate d on the EPA urban test cycle and 10.2 miles on its nominal storage capacity of electricit y when operated on the EPA highway test cycle. 111 The statute contains particul ar requirements for dual fu eled automobile labels. Section 32908(b)(3) requires that each label (A) indica te the fuel economy of the automobile when operated on gasoline or diesel fuel, (B) clearly identify the automobile as a dual fueled automobile, (C) clearly id entify the fuels on which the automobile may be operated; and (D) contain a statement that additional information required by the statute is in the fuel economy booklet. The additional information required in the booklet for dual fuel automobiles is described in 32908(c)(2) and states that the label will include the energy efficiency and cost opera tion of the automobile when operated on gasoline as compared to when operated on al ternative fuel and the driving range when operated on gasoline as compared to when ope rated on alternative fuel. It should also include information on the miles per gallon ac hieved when operated on alternative fuel and a statement explaining how these estima tes may change when the automobile is operated on mixtures of altern ative fuel and gasoline. For simplicity and consistency, the agen cies plan for all PHEV fuel economy labels to contain the information required for dual fueled vehicles under the statute, even though only some PHEVs are dual fuel automobiles. We seek comment on this approach. The fuel economy required on the label means the average number of miles traveled by an automobile for each gallon of ga soline (or equivalent amount of other fuel) used. 112 Therefore, in order to meet the st atutory requirement th at fuel economy be displayed on the label, the electricity use for EVs and PH EVs on the fuel economy label is converted to gallons of gasoline equivalent. EPA recognizes that the statutory re quirements in the Energy Policy and Conservation Act of 1975 were adopted long before advanced technologies like EREV PHEVs and blended PHEVs were even concei ved. While EPA must meet the statutory requirements, the agencies are concerned that requiring electricity to be conveyed in MPG equivalent values might actually make an advanced technology vehicle label less

109 49 U.S.C. 32901(a)(9)(A), (B), (C). EPA is extending the application of the subclause (C). 110 49 U.S.C. 32901(a)(9)(D). 111 49 CFR 538.5(b). 112 49 U.S.C. 32901(a)(11).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 63 of 339 useful to consumers. The agencies seek publ ic comment on this question as explained in more detail below. 3. Principles Underlying the Co-Pr oposed Advanced Technology Vehicle Labels The agencies have found it helpful to identify a few basic principles to guide our thinking about and development of advanced technology vehicle labels.

• The advanced technology vehicle labels s hould provide objective information that helps consumers make good decisions for both themselves and the environment. The market research undertaken for this rulemaking found that the current fuel economy label is a trusted source of info rmation regarding the fuel economy of today’s conventional gasoline vehicles a nd the agencies seek to build on this foundation by ensuring that consumers rece ive objective, useful and essential information that helps inform their advanced technology vehicle purchasing decisions. 113 The agencies recognize that many of the most important drivers for the public and private interest in advanced vehicle technologies are in fact related to energy and environmental considerations.

• The advanced technology vehicle labels should aim for the simplest way to provide fairly complex information. As discussed above in the introduction to this section and with specific examples later in this section, the agencies are aware that advanced technology vehicle labels will inherently be more complex than conventional vehicle labels. We strive to strike a bala nce between providing sufficient information to be helpful and credible (too simple runs the risk of misinformation with such complex technologies), without trying to “do everything” on the label (which could be a source of confusion for many consumers). We believe that automakers and respected third- party organizations (and possibly the federal government via fueleconomy.gov or other websites) will develop sophisticated on-line (and possibly on-vehicle) ca lculators that will allow consumers to customize energy, environmental, and cost information for their unique driving and battery re-charging hab its. We believe that labels should be aimed at the consumer who wants a quic k overview of energy, environmental, and cost performance, and that those co nsumers who want detailed, customized information will look to other sources.

• The advanced technology vehicle labels mu st be as equitable as possible across different technologies, both advanced and conventional. For example, the agencies want to avoid picking a label design or label metric that inherently favors a certain advanced technology be yond the energy and environmental merits of the individual vehicles. There could be considerable consumer confusion when multiple advanced technology vehicles reach the market, each with their own marketing strategy, and labels are one way to minimize consumer confusion. We

113 Environmental Protection Agency Fuel Economy Label: Pre-Focus Groups Online Survey Report, EPA420-R-10-907, August 2010, p. 5.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 64 of 339 specifically solicit comments from automake rs on whether we have achieved this goal of equity with our proposed label designs.

• Finally, while labels should provide one or more metrics to compare across vehicle technologies, both advanced a nd conventional, the advanced technology vehicle labels do not have to have the sa me precise design as conventional vehicle labels. Given that many of the label c ontent issues associated with advanced vehicle technologies are much more comp lex than for conventional vehicles, it would probably be impossible for the labels to look the same. On the other hand, we do want the “look and feel” of th e advanced technology and conventional vehicle labels to be as consistent as possible. EPA and NHTSA seek public comment on the appropriateness of each of these principles, and whether there are additiona l principles that we should consider. 4. Key Advanced Technology Vehicle Label Issues Most of the content on advanced technology vehicle labels will be similar to that on conventional vehicle labels. This section addresses those issues that are unique to advanced technology vehicle labels.

a. Upstream Emissions This section discusses how the agencies plan to address the issue of greenhouse gas emissions associated with the use of mo tor vehicles, in the context of a program specifically designed to provide consumers with information that will be useful when purchasing a vehicle. The agencies’ appr oach takes into account (1) the statutory language, (2) the fact that the law requires a great deal of information to be presented on the label, (3) the limited amount of informa tion that can be provided on a label, (4) the importance of simplicity, clarity, accuracy, and intelligibility on the label, and (5) the ability to provide the public with add itional and comprehensive information in a consumer-friendly format on a website. 114 This discussion focuses on, but is not limited to, the advanced technology vehicles that use electricity from the grid to power vehicles, such as the electric vehicles and plug-in hybrid s that are expected to enter the market in larger numbers in the coming years; the disc ussion also refers to the use of renewable fuels in gasoline-powered vehicles. For reasons outlined below, our proposed approach would limit the label to tailpipe-only emissions while providing much fuller information on a website. But we also identify, and seek comments on, alte rnative approaches, designed to accommodate the relevant variables. The agencies believe that the proposed approach follows from a reasonable interpretation of the Energy Policy and C onservation Act (EPCA), as amended by the

114 On the relationship between summary disclosure, as on the label, and full disclosure, as on the website, see http://www.whitehouse.gov/s ites/default/files/omb/assets/info reg/disclosure_principles.pdf.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 65 of 339 Energy Independence and Security Act (EISA) of 2007. The statute states that NHTSA must require vehicles to be labeled with information “reflecting an automobile’s performance ... [with respect to] greenhouse gas ... emissions ... of the automobile.” 115 This information is to be based on criteria developed by EPA. NHTSA believes that a reasonable interpretation of this provision is that only GHG emissions directly from the vehicle itself are required for the label. On that interpretation, the information on performance and the rating of the vehicles would both be based on the emissions of the vehicle itself. This interpretation is also c onsistent with the hist ory of the EPA labeling program and its focus on the vehicle itself. NHTSA believes that it would also be reasonable to interpret the statutory language such that the required label information on GHG emissions would include additional in formation on the upstream GHG emissions associated with electricity or other fuels used by the vehicle. This additional information could provide a broader contex t for reflecting the automobile’s performance with respect to GHG emissions. The agencies recognize that “lifecycle” GHG emissions are associated with the production and distribution of all automotive fuels used by motor vehicles. Lifecycle GHG emissions are associated with gasoline, diesel, and other fuels such as natural gas, electricity, and renewable biofuels. The agenci es also recognize that while tailpipe-only emissions provide important information, a significant number of consumers may want, or benefit from, access to information on th e total upstream GHG em issions associated with the operation of their vehicles. For ex ample, electric vehicles do not have any tailpipe emissions since their motors do not burn fuel, but producing the electricity used to power such vehicles most likely emits greenhouse gases. Consumers might seek, or benefit from, a label that allows for simple and accurate comparisons across vehicles on the total upstream GHG emissions, in additi on to tailpipe emissions. However, the agencies emphasize that developing the re levant information, and providing it to consumers in a manner that is accurate and meaningful, raises a number of challenging issues, particularly in the context of the label. A full lifecycle evaluation would include an evaluation of a comprehensive set of GHG and energy impacts associated with both the vehicle (extracti on and processing of materials, energy used in assembly, distribut ion, use, and disposal, etc.), and the fuel (feedstock extraction, feedstock transport, fuel processing, fu el transport, etc.). In practice, however, offering even the mo re limited accounting for GHG emissions from production and distribution of the fuel, including electricity, presents complex challenges. EPA currently does not measure fuel com bustion/electricity generation GHG emissions in its vehicle testing. The agencies recognize that modeling can be performed to assist in estimating these emissions. But in de veloping upstream GHG emissions values, modeling would need to be done carefully to avoid inaccuracy and consumer confusion, especially in light of vari ations across time and across regions. For example, GHG emissions from electricity generation will vary significantly in the future, based on the

115 49 U.S.C. 32908(g)(1)(A)(i). 49 U.S.C.32908(g)(1)(A)(ii) also refers to GHG “emissions of automobiles,” and further requires a designation of automobiles “with the lowest greenhouse gas emissions over the useful life of the vehicles.”Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 66 of 339 different fuels used at generating stations -- perhaps by as much as an order of magnitude between coal and non-fossil feedstocks. It is true that the EPA has undertaken ex tensive lifecycle modeling of biofuels for the Renewable Fuel Standard rulemaking in response to the require ments of the Energy Independence and Security Act. But that assessment was done in the context of the particular mix of biofuels required nationa lly in 2022 by the Act, with a series of assumptions and estimates that may not be accurate today. One overriding issue is whether the agenci es could reasonably provide a single, national value for GHG emissions from electri city generation or could provide instead different values customized for various regions of the country. 116 There are data sources upon which a single national number could be derived. For individua l owners, however, a single national value would generally not be accurate, and the individual would need access to additional information, such as regi onal values, to evaluate the impact of a specific vehicle. 117 In addition, the ag encies would have to de cide (1) whether to use average or marginal (i.e., reflecting the fact that increased vehicle demand might change the overall mix of electricity sources) GHG em issions factors, and (2) if the marginal approach is used, whether to assume all nighttime charging or a mix of daytime and nighttime charging. Another major consideratio n is whether to base electricity generation GHG emissions values on today's electric ity markets or on projected changes in electricity markets that might occur by 2020 or some other year (note that vehicles produced in the next few years will remain in the fleet for 15 or 20 years or more). Some states have already passed legislat ion that could require major changes in how electricity is produced in those states in the future, and Congress has considered landmark legislation as well. It is clear th at the question of how electricity will be produced in the future is very fluid. As a result of the En ergy Independence and Security Act biofuel mandates, for example, the agen cies expect the amount of biofuel in the transportation fuel market to increase si gnificantly over time, and the contribution of feedstocks to change over that time as well. Information that addresses lifecycle emissions of biofuels would need to take these considerations into account. The agencies believe that all of these complex factors can be best addressed by providing a great deal of relevant info rmation on a website, which can go into considerable detail and be changed and update d as appropriate. We currently do not have a full lifecycle analysis from which to draw fo r labeling purposes acr oss the full range of vehicles and fuels. The information repor ted to EPA on emissions from fuel production varies across fuel types and is much more detailed for gasoline production. At the present time, it would be difficult to represent emissions from energy generation on a national label in a way that is both us eful and accurate for consumers, given regional variations, how generation within regions is dispatch ed, and access to green power purchases. 116 See http://www.eia.doe.gov/energ yexplained/index.cfm?page=electric ity_in_the_united_ states for an overview of the national U.S. electric power industry net generation by fuel type. 117 Regional values could be provided on a web site. EPA has a website (http://www.epa.gov/cleanenergy/energy-and-you/how-clean .html) on which consumers can enter their zip code and find out what fuel mix is used to produce the electricity they use.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 67 of 339 Therefore, EPA and NHTSA are proposing that the label shoul d limit itself to tailpipe only emissions (clearly identifi ed as such) and include a more complete discussion on energy generation and lifecycle an alysis on the webpage. We believe that this approach will prove sufficiently informativ e to consumers. It also allows us the opportunity to provide a fuller discussion of GHG emissions associated with energy generation for alternative vehicles, as well as emissions from fuel production (gasoline and biofuels). For example, a website could provide calculator tool s that could reflect regional variations in the GHG emissions associ ated with electricity generation as well as use national averages. A website could also provide information on the projected fuel lifecycle impacts associat ed with biofuels. The website could be updated over time as the mix of electricity fuel sources and biofuels changes. This approach could help the consumer understand over the lifetime of thei r vehicles how their electricity generation emissions impacts might be changing. At this point in time, any effort to provide complete lifecycle information for fuels on the label could well produce undue confusion. A label that clearl y presents tailpipe emissions appears to be the best available way to combine accuracy and disclosure, so long as fuller information is available on th e website. The agencies believe that even though many consumers will not visit the website, it will be used by many groups and organizations, and as a result, the informati on that it provides will be made available and used in the marketplace. We seek comment on our current view that the web is the better place, compared to the label, to address th e complex issues associated with emissions associated with electricity generation and lifecycle emissions more generally. We invite both general and particular comments on the proposed approach. For example, we encourage commenters to be as specific as possible with any recommendations on how to address fuel combustion/electricity generation GHG emissions on the website. If information on these emissions is to be provided on a website, exactly what information? The ag encies specifically invite comment on how to address fuel combustion emissions associated with the electricity used to power the advanced technology vehicles starting to enter commerce, such as electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs). Th e agencies also invite comment on how to address full GHG emissions from biofuels on a website. Should emissions be identified specifically for the emissions associated with the combustion of fuel to produce electricity? Should such emi ssions be determined on a regional or a national basis? Should these emissions be provided as a relati ve comparison to a gasoline or diesel fuel, the current predominant fuels? For the convenience of commenters, we have prepared the table below as an illustrative example of one simplified way that some lifecycle emissions information related to electricity pro duction could be accounted for on a website, based on certain assumptions. 118 It is important to note that for comparison purposes, the agencies would

118 The key assumptions underlying the illustrative numbers in the right-hand column are that:EV and PHEVs all assumed to use 200 Watt-hours per mile wh en operating on electricity over the EPA test and assuming a 30% range (43% electricity consumption) shortfall from test to road.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 68 of 339 need to develop methodologies to compare upstream emissions impacts from all other fuels as well, including diesel, renewable fuel s, and natural gas. Consistent with the discussion above, it is important to emphasize th at the tailpipe + lifecycle values in the table below are based on 2005 national averag e electricity GHG emissions, and could be very different for certain regions of the count ry today and for the nation in the future if there are major changes in the mix of methods used to generate electricity or in the GHG emissions associated with its generation.Proposal--TailpipeOnly Tailpipe + Upstream
Vehicle CO2/mile CO2/mile Example EV 0 197 Example PHEV 1 89 210 Example PHEV2 133 217 Toyota Prius HEV 178 224 Honda Civic HEV 212 266 Honda Insight HEV 217 273 Ford Fusion HEV 228 287

In general, for purposes of providing in formation on the web, the agencies invite comment on the appropriate metrics to use a nd the specific suggesti ons for content and format, if appropriate. The agencies also request comment on which web resources it should prioritize for development that would provide the most useful information to consumers. The agencies acknowledge that more consumers will look at the label than at the website, and that a “0” figure for GHG emi ssions might prove confusing to some consumers. While accurate and more complete information will be provided on the website, putting 0 grams CO2/mile on the labe l may lead some consumers to perceive that driving their EV does not contribute to GHG emissions. With respect to the label itself, the agencies are also requesting comme nt on alternative options for the label that, in addition to presenting tailpipe emissions , refer to or identify in some manner the emissions associated with the lifecycle of the fuel. Under one version of this alternative that is under serious consideration, similar to a co-proposal, the EV label would continue to reflect the "0" CO2g/mile number currently displayed on the co-proposed labels (Figures III-2, III-10), but the label would be modified by a dding either a symbol or an asterisk and explanatory text which states, "The only C02 emissions are from electricity generation." Likewise, the agencies woul d modify the co-proposed PHEV labels

• PHEV 1 assumed to operate on electricity 50% of the time.

• PHEV 2 assumed to operate on electricity 25% of the time.

• Uses 2005 nationwide average value of 0.642 grams of GHG per Watt-hour at powerplant (adjusted to include GHG emissions from feedstock extraction, transportation, and processing as well) from MY2012-2016 light-duty vehicle GHG final rule (75 Federal Register 25437).

• Assumes typical 7% electricity grid transmission losses.

• Uses 2250 grams GHG per gallon of gasoline.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 69 of 339 (Figures III-3, III-6, III- 1, III-12) inserting either a symbol or asterisk next to the current CO2g/mile number displayed with the follo wing explanatory text , “Does not include CO2 from electricity generation.” This alternative approach might provide more accuracy and clarity for purchasers by more explicitly indicating that the CO2 em issions from generation of electricity are not reflected in the CO2 numbers on the label. Under this alternative, FFV labels (for FFV vehicles only) would c ontinue to reflect the ga soline only CO2g/mile number currently displayed on the co-proposed labels (Figures III-8 and III- 14), but the label (for FFVs only) would be modified by adding either a symbol or an asterisk and explanatory text that might state, “The CO2 emissions li sted here are from ga soline combustion only. They do not reflect the use of renewable bi ofuels.” The agencies request comment on this alternative option. The agencies are also giving consideration to an approach that in addition to the tailpipe emissions, includes information on upstream emissions on the label for the various fuels. For electric vehicles, fo r example, GHG emissions are (on an average basis) a function of KwH per mile, and thus c ould in principle be cal culated, and if a full or nearly full accounting could be provided in a clear and intelligib le form, there would be advantages to providing it on the label to consumers, in addition to the tailpipe emissions data. Therefore, the agencies inv ite comment on the feasibility and usefulness of an alternative approach that in additi on to identifying tailpipe emissions, would include a separate value for upstream emissions on the label as well as on the website. In particular, the agencies invite commen t on what type of information should be considered as “upstream,” and whether a la bel including the upstream emissions could be based on national averages. The agencies mi ght consider making assumptions to develop national averages. Note, however, that agencies would need to make a substantial number of assumptions to develop such averages. These include assumptions about the overall impact on electric car recharging on the grid mix, which would include making assumptions about (1) the time-of-day distri bution of recharging and (2) the subsequent impacts on the base and peak load electricity generation as well as (3) the nature of regional variability and (4) potential changes in the electricity generation fleet. A relevant source for this type of info rmation may be the Energy Information Administration (EIA), which provides estimates of the future electricity generation mix, so there may be some basis for estimating future GHG emissions ba sed on current state and federal policies; but these estimates will also rest on some uncertain assumptions. The same type of analysis (national averag es for feedstocks and fuel production) would need to be developed and equivalent assumptions made related to upstream emissions from gasoline and diesel production as well as renewable fuels, natural gas, and hydrogen. The agencies invite comments on whet her and how the possible inclusion of upstream emissions information on the label might affect other elements of the label suchFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 70 of 339 as design, format, presentation of the various ratings and other information as well as the ranking of vehicles on the label. The agencies also recognize that notwithstanding the many challenges, a potential advantage of including upstream emissions on th e label is that consumers may be able to compare different EVs with respect to thei r upstream emissions, as some will require more energy per mile which would likely result in different upstream emissions impacts. Consumers may be able to make similar comparisons among EVs, PHEVs, gasoline and diesel powered vehicles as well as other fueled vehicles on the basis of upstream emissions. Regardless of what would be presented on the label, the agencies will continue to provide detailed information about the lif ecycle GHG impacts of different vehicles on the website in a way that may provide a bett er way for individuals to take their region, driving habits, and other specific factors into account in their purchase decisions. In view of the many assumptions the agen cies would need to make to include upstream emissions on the label, we emphasi ze that this alternative would have to overcome several serious challenges. We as k for comment on whether and how each of those challenges, outlined above, could be addressed.

b. Energy Consumption Metrics Energy consumption metrics are another issue which becomes more complicated with advanced technology vehi cles. For conventional gasoline vehicles, the MPG metric has been the foundation of the consumer label fo r 35 years. It is not a perfect metric, and some have expressed concerns about its “non-linearity,” e.g., the absolute fuel consumption savings associated with improving one mile per gallon from 10-11 MPG is over ten times greater than th e fuel consumption savings associated with improving from 35-36 MPG as discussed above. But, in some respects, MPG has been a good metric for a consumer information program: lay people had used the MPG metric prior to its use on the label, the concept was simple and understood by almost all consumers, the practical range of 10-50 MPG was accessible to lay people and facilitated simple calculations that most consumers could perform, etc. The results from recent EPA focus groups conducted by the agencies were unequivocal—the MPG values were, by far, the most trusted and useful values on the label. 119 Unfortunately, while the miles per gallon me tric has been very useful when 99+% of all vehicles operated on petr oleum fuels, its usefulness as a metric is less clear for a future vehicle fuel such as electricity, whic h is not measured in gallons, but rather in kilowatt-hours. Therefore, for an electric vehicle, or for an EREV PHEV when operated exclusively on grid electricity, there are th ree broad choices for a consumption metric, independent of statutory consid erations, to charac terize the amount of electricity and all have advantages and disadvantages:

119 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010 , p. 10.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 71 of 339 • Kilowatt-hours. The rationale for kilowa tt-hours is that this is the metric by which electricity is “counted” and so ld. In their monthly utility bills, consumers are charged a certain rate (or price) per kilowatt-h our, and this rate is multiplied by the number of kilowatt -hours that the consumer uses, to generate the overall monthly electricit y bill. This is analogous to what happens at a gasoline servi ce station, where a consumer pays a certain rate (or price) per gallon of gasoline, and this rate is multiplied by the number of gallons of gasoline that the consumer buys, to generate the overall gasoline bill. The primary argument against us ing kilowatt-hours is that the focus groups conducted by the agencies clea rly indicates that few consumers understand what a kilowatt-hour is, and most of the consumers who do not know what a kilowatt-hour is say that they do not want to learn. 120

• Gallons of gasoline-equivalent. From an engineering perspective, energy can be measured, and different forms of energy can be compared through the use of energy unit conversion factors. For example, a gallon of gasoline has the energy equivalent of 33.7 kilowatt-hours, and any value for kilowatt-hours can be converted to an energy-equivalent value of gallons of gasoline. 121 For example, a vehicle that used 33.7 kilo watt-hours would have used an amount of energy equivalent to 1 gallon of gasolin e, while a vehicle that used twice as much electricity would have used an am ount of energy equivalent to 2 gallons of gasoline. The rationale for using ga llons of gasoline-equivalent is that consumers understand the concept of “gallons” much more than they understand any other energy metric. In the focus groups conducted for this rulemaking, the agencies found that part icipants believed they understood the equivalency approach and felt comfortabl e with this metric since it closely aligns with the miles per gallon metr ic that they have always relied upon. 122 The primary argument against using gallons of gasoline-equivalent is that the concept requires the conversion of one form of energy to another, and while this reflects a technical measurement of energy equivalency, it may or may not be useful to the consumer. For ex ample, gasoline and electricity are very different fuels in many ways: how they are produced, how consumers buy them and refuel, whether consumer fuel expenditures stay in the local or regional economy or ar e exported, etc.

• A generic energy unit not directly connected to either gasoline or electricity, such as British Thermal Units (BTUs) or joules. The argument here would be to pick an energy metric that is “fuel neutral.” The primary arguments against this are both that few consumers underst and such a metric, and that no motor

120 Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904, August 2010 and Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420- R-10-905, August 2010. 121 65 FR 36990. 122 Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904, August 2010, p. 22.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 72 of 339 fuels are counted or sold in such units . While the agencies recognize this as another conceptual alternative, we have rejected this approach. As discussed previously, EPCA requires that electricity use for EVs and PHEVs on the fuel economy label is converted to gall ons of gasoline-equivalent. But the statute also provides discretion to EPA on the re lative prominence of a gallons of gasolineequivalent metric and a kilowatt-hours metric. For EV labels, the agencies propose to show electricity consumption in both metrics: as miles per gallon of gasoline-e quivalent (MPGe) and as kilowatt-hours per 100 miles. The agencies recognize that highe r MPGe values are be tter, while lower kwhr/100 miles values are better. The agencies seek comment on whether this is helpful or confusing to consumers. The most complicated advanced technology vehicle in this regard is a blended PHEV that is operating simultaneously on gaso line and grid electricity. There are two options for energy metrics for blended PHEVs, which are based on the general concepts introduced above.

• Retain separate energy metrics for gasoline and electricity. The gasoline metric would continue to be miles per gallon of gasoline (supplemented by a gallons/100 miles consumption value as well), while th e electricity metric would be kilowatthours of electricity (either miles per kilowatt-hour or kilowatt-hours per 100 miles). The advantages of this approach are 1) it includes the values that EPA measures, 2) the metrics reflect how th ese forms of energy are counted and how consumers pay for them, 3) the separate values do not requ ire judgments about whether consumers “value” gasoline and el ectricity equally or not, and 4) it would avoid possible confusion over what a co mbined miles per gallon of gasolineequivalent value means (i.e., some, maybe many, consumers would probably assume that a miles per gallon of gasolin e-equivalent value was equal to a miles per gallon of gasoline value, which woul d be inaccurate). The disadvantages of such an approach are 1) few consumers understand the metric of kilowatt-hours, 2) dual energy metrics make it extremely difficult to compare energy efficiency across vehicles, and 3) those consumer s who focus only on miles per gallon of gasoline and ignore kilowatt-hours of elect ricity, will believe that a blended PHEV is more energy efficient than it actually is.

• Combine to a single energy metric of m iles per gallon of gasoline-equivalent. This would require the use of the conv ersion factor of 33.7 kilowatt-hours per gallon of gasoline-equivalent value cited a bove. The advantages of this approach are 1) it yields a single value that simp lifies the label and facilitates vehicle comparisons, 2) it avoids the kilowatt-hour metric that consumers do not like or understand, and 3) some consumers (though not all) said they liked the concept of miles per gallon of gasoline-equivalent. The disadvantages of such an approach are 1) it requires the simplifying assumption that all forms of energy (in this case, gasoline and electricity) are equally valu ed, 2) it does not allow the consumer toFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 73 of 339 see the individual energy consumption valu es for gasoline and electricity, and 3) it will yield labels with both miles per gallon of gasoline and miles per gallon of gasoline-equivalent, which could be confusing to some consumers. The agencies are proposing to use the m iles per gallon of gasoline-equivalent metric only for PHEVs, but seek public co mment on the relative merits of doing so versus using the separate energy metrics. The agencies believe that both approaches have advantages and disadvantages. In formulati ng comments on this topic, commenters could also consider three additiona l questions. One, do consumers care equally about gasoline and electricity, i.e., are they just two different ways of fueling their vehicles, with a Btu of gasoline equivalent to a Btu of electricit y, or do some or most consumers care more about one or the other form of energy? Tw o, how should the agencies interpret the focus group input in which most participants indi cated that they did not understand kilowatthours on their electric bills and did not want to have this metric included on advanced vehicle labels? Three, should we view this as an opportunity to e ducate consumers about the importance of kilowatt-hours as a f undamental measurement of electricity consumption? c. Driving Range Information (i ncluding 5-Cycle Adjustment) EPA does not include range information on conventional fuel economy labels. Petroleum fuels have high energy densities and are stored on-board the vehicle in relatively cheap and lightwei ght fuel tanks. The combin ation of high driving range values (gasoline vehicles typi cally have ranges of 300-500 mile s) and the fact that range can be increased by simply increasing the si ze of the fuel tank, means that range for petroleum-fueled vehicles has not been a top co nsumer priority. In recognition of the fact that non-petroleum fuels generally have lo wer energy densities resulting in reduced driving ranges than petroleum fuels, th e Federal Trade Commission (FTC) requires a label that lists the “manufacturer’s estimat ed cruising range” for alternative-fueled vehicles. 123 The primary issue addressed in this s ection is whether range should be included on advanced technology vehicle labels. For an EV, the primary range parameter of interest would be the miles that can be trav eled between battery charges. For an EREV PHEV, the most important range parameter would be the miles th at can be traveled in allelectric mode. For a blended PHEV, the pr imary range parameter would be the number of miles over which the battery is providing assi stance in the form of grid electricity, but it is also possible that there could be some gua ranteed or likely all-el ectric range as well. The primary arguments for including range include 1) focus groups strongly supported including the range for EVs and PHEVs, 124 2) range is a critical factor for what the consumer gets for his or her investment in a more expensive EV or PHEV, and is obviously a core utility attribute for an EV and a primary determinant of the overall

123 16 CFR part 309. 124 Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904, August 2010, pp 17, 28, and 38.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 74 of 339 environmental and energy performance of a PHEV, and 3) EPA can easily measure range. The arguments against including range includ e 1) it is not a direct measurement of energy or environmental performance (in fact , for an EV, other things being equal, a higher range means a larger battery pack, a h eavier vehicle, and therefore higher energy consumption, relative to the same vehicle with a lower range and sm aller battery pack), 2) there will likely be much greater variabil ity in EV range than we have faced with gasoline fuel economy in the past, so there ar e greater challenges involved in defining a specific range estimate, and 3) adding ra nge would add to an already busy label. The agencies are proposing to includ e range information on alternative technology vehicle labels and seek public comment on this issue. A related issue is how EPA will determine the appropriate adjustment factor to use in converting 2-cycle test values for range to 5-cycle test values for vehicle labels. Under current EPA regulati ons established by the 2006 fu el economy label rulemaking, automakers would have two choices: 1) submitting 5-cycle test data, and 2) using the MPG-based (derived 5-cycle) equations. 125 Using the MPG-based equations for EVs would yield an approximate 40 percen t downward adjustment for EV range. 126 EPA notes that there were no EV or PHEV data in the database used to generate the MPGbased equations, and that the downward adjust ment appropriate for EVs (which have low direct vehicle energy consumption levels) is th e result of extrapolating the results of the conventional vehicle data that was used to generate the equations. EPA proposes a new set of options for automakers to choose for purposes of identifying the appropriate 5- cycle range adjustment for EV s and the electric portion of PHEV operation. One, automakers could provi de full 5-cycle test data, which is one option under current EPA regulations. Two, au tomakers could provide vehicle-specific real world range data collected from in-use vehicles. Three, automakers could use the MPG-based equations discussed above, but w ith the downward adjustment capped at the percent reduction represented by the worst-case gasoline vehi cle in the EPA database. The worst-case gasoline vehicl e is the highest-MPG gasoline vehicle, which is currently the Toyota Prius. Based on the application of the MPG-based equations to the Prius’ MPG values, the Prius would get about a 30% downward adjustment from its 2-cycle data to its derived 5-cycle value, and this would therefore be the level that automakers could use for EVs and the elec tric operation of PHEVs. EPA seeks comment on this proposal for the downward 5-cycle adjustment for EVs and PHEVs.

125 71 FR77887-77888, Dec 27, 2006. 126 See 40 CFR 600.210-08. Using the equations in these regulations to adjust 2-cycle test values for extremely high MPG vehicles (or MPGe for EVs) w ill result in adjustments approaching 40 percent. Because the data used to determine these equations di d not include any such vehi cles, EPA is uncertain as to the applicability of the formulae to EVs and other extremely high MPG vehicles.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 75 of 339 d. Battery Charging Time Information EPA does not include information on the mechanisms for or time associated with refueling vehicles on conventional vehicl e fuel economy labels. Refueling with petroleum fuels is a fairly quick and ubiquito us process, and has not been a topic of consumer concern. Refueling, or charging, a batt ery pack will be different in many ways. While gasoline vehicle refueling typically takes 5-10 minutes, charging a battery pack can take up to 12 hours or more, depending on the charging hardware. EPA focus group participants expressed strong interest in incl uding some type of information on charging time on labels for EVs and PHEVs. 127 The arguments for including battery ch arging time information on EV and PHEV labels include 1) focus groups supported doi ng so, 2) it is a core consumer utility parameter (i.e., if the charging time is so long as to be onerous, consumers will recharge less frequently and this will have an eff ect on the vehicle’s energy and environmental performance), and 3) EPA could develop a test procedure for generating standardized information. An example of a simple approach for m easuring EV recharge time would be to use the method for recharging the batt ery recommended by the manufacturer and available to the consumer. Full battery rech arge time could be defined as the time required to charge the vehicle battery to full capacity from the end of the electric vehicle range test or “empty.” A fully charged battery would be defined as the same battery state of charge used to determine electric vehicl e range. EPA is also seeking comment on partial recharge time. Partial recharge time could be measured and expressed as the time of recharge required to travel a given distance. Arguments for excluding battery chargi ng time on EV and PHEV labels include 1) there is only an indirect relati onship between charging time and energy and environmental performance, 2) EPA does not now have a test procedure for generating standardized data, 3) it will be fairly easy for consumers and third parties to verify automaker claims on this basic question, and 4) adding battery charging time will make the advanced technology vehicle labels more cluttered. The agencies seek comments on whether we should include battery charging time information on labels for EVs and PHEVs. e. Merged Vehicle Operating Mode Information for PHEVs Conventional vehicles have a single “operating mode,” i.e., all the powertrain components contribute to propel the vehicle at all times. Some advanced technology vehicles have more than one operating mode. For example, a blended PHEV could have up to three operating modes: an all-electric mode where the vehicle is propelled exclusively by grid electricity via the battery and electric motor, a second mode where

127 Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904, August 2010, pp. 16, 26, and 38.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 76 of 339 the vehicle is propelled by a combination of both grid el ectricity and an internal combustion engine, and a third mode that uses only the internal co mbustion engine. For such vehicles, the agencies propose to pr ovide consumers with basic performance information about each of the PHEV’s indivi dual operating modes. One advantage of this approach is that it will allow consumers to tailor the information from the individual operating modes to their own driving hab its, and therefore develop “customized” information relevant to their own situations. One issue is whet her the vehicle label should also provide information that combines the various operating modes into a single “merged” value reflecting an “average driver .” One group that is developing guidance for how individual operating mode data could be combined for an “average driver” is the Society of Automotive Engineers Hybrid Technical Standards Committee, 128 and the agencies will continue to monitor the wo rk of this and other relevant committees. The rationale for including a merged valu e is that 1) some consumers may find information on the individual operating modes to be “too much” and may be more likely to pay attention to a single set of performa nce information, 2) few, if any, consumers will exclusively drive in a singl e operating mode, so some kind of combined information could be helpful, and 3) a single, merged va lue can facilitate comparisons across different vehicle technologies and models and 4). Cust omers of this new technology will not know how much they will operate the vehicle in each mode, so an average provides more complete information to them. The arguments against including merged valu es are 1) the vari ability between the performance values for different operating modes can be very large, and so any assumptions about an “average driver” will be accurate for some consumers, but very inaccurate for many other consumers, and 2) including merged values, in addition to individual operating mode values, will add to an already busy label. The agencies seek public comment on the que stion of whether labels for advanced technology vehicles with multiple operating modes should also include merged values that combines the various vehicle operating modes, and if so, on the best methodology for doing so. f. City/Highway versus Combined Values EPA’s conventional vehicle labels have long reported fuel economy values for both city and highway driving. For most conventional vehicles, highway fuel economy values are typically 40-50% higher than city fuel economy values. The agencies believe that this is another issue that is worth r eexamining with respect to advanced technology vehicle labels. Arguments for including separate city and highway information on advanced technology vehicle labels include 1) focu s group feedback and other research has consistently shown that consumers find it useful to have separate fu el economy values for

128 SAE J2841.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 77 of 339 both city and highway drivi ng for conventional vehicles, 129 and 2) since driving habits can vary widely, separate city and highway performance information can be helpful to those consumers who want to “customize” label information to their own driving habits. Arguments for not including separate city and highway information on advanced technology vehicle labels include 1) some advanced technologies, for example EVs, show less of a change in energy consumpti on values between city and highway driving than do conventional vehicles which was one of the primary reasons why EPA originally displayed separate city and highway MPG va lues on conventional fuel economy labels, and 2) not reporting separate city and highway values can reduce some information by either a factor of two (if a combined value is shown instead of separate city and highway values) or three (if city, highway, and combined values were all shown), thus reducing the “number of numbers” on the label and po ssibly making the labels more readable and accessible for consumers. Focus group partic ipants, when viewing whole labels for both conventional and advanced technology vehi cles, did not express a preference for displaying city/highway numbers for advan ced technology vehicles, although they did express a clear preference for city/hi ghway values for conventional vehicles. The agencies seek public comment on the following questions related to separate city and highway information for advanced technology vehicle labels . One, should EPA never report separate city a nd highway values, always repor t separate city and highway values, or retain discretion for doing so onl y when it is appropriate (i.e., when the differences between city and highway are significant enough to be meaningful)? Two, would it be acceptable for EPA to require the use of separate city and highway fuel economy values for conventional vehicles, but to not do so, in some or all cases, for advanced technology vehicles? g. Methodology for Merged Values for PHEVs One specific issue for PHEVs is the methodology for determining a single merged value that combines the various operating mode s into a single overall value, given that PHEVs use both gasoline and gr id electricity. The agencies expect that consumers who purchase a PHEV will do so with the intention of utilizing the capability of both fuels (e.g., it seems reasonable to assume that mo st consumers who purchase a more expensive PHEV would then charge the PHEV as freque ntly as possible in order to achieve fuel savings by maximizing their use of electricity and minimizing their use of gasoline). It thus seems appropriate to in clude the operation on both fuels in any merged values, using a weighted average of the appropriate metric for each of the modes of operation. The agencies propose and seek comment on using a methodology developed by SAE and DOE based on utility factors (UFs) - which pred ict the fractions of total distance driven in each mode of operation (electricity and ga s) - to assign weighting factors for gasoline and electricity use for PHEVs for the purposes of determining merged values for fuel economy and/or greenhouse gas ratings and fo r any other metrics for which a single,

129 Environmental Protection Agency Fuel Economy Label: Phase 1 Focus Groups, EPA420-R-10-903, August 2010 and Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420- R-10-905, August 2010, p. 12.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 78 of 339 merged value is appropriate. The propos ed UF methodology is de scribed in detail in Section VI.B. h. Advertising Restrictions The federal lead on guidelines for the use of vehicle label information in automaker marketing campaigns rests with the Federal Trade Commission (FTC). The agencies believe that the unique issues, as we ll as in the likely increased complexity and “number of numbers,” associated with a dvanced technology vehicle labels, warrant additional consideration of whether there needs to be new guidelines for the use of label information in private marketing campaigns. Th e agencies intend to ra ise this issue with the FTC, and seek comments from the public th at could help inform our input to the FTC. C. Labels for Other Vehicle/Fuel Technologies Labels for conventional gasoline and dies el vehicles and for certain advanced technology vehicles are the prim ary focus of this proposed ru le. Conventional gasoline and diesel v ehicles are expect ed to make up a majority of the fleet well into the future, and improving on the communication of conven tional vehicle fuel economy and related information is a continued prio rity of EPA and NHTSA. El ectric vehicles and plug-in hybrid electric vehicles are ente ring the fleet in the near te rm, and there is the potential for a rapidly increasing market penetration of these vehicles in the future, yet labeling these vehicles in an understandable and equi table way presents significant challenges. However, there are several other specific vehicle technologies fo r which EPA currently has labels, and EPA is also proposing new label templates for those as well. 1. Flexible Fuel Vehicles Flexible fuel vehicles (FFVs) (also ca lled flex-fuel, dual-fueled or bi-fueled vehicles) are vehicles that can operate either on gasoline or diesel fuel, on an alternative fuel such as ethanol or metha nol, or on a mixture of conven tional and altern ative fuels. Produced since the 1980s, flexible fuel vehicl es (FFVs) are the most numerous of the currently available alternativ e fuel vehicles, with dozens of 2010 car and truck models available from General Motors, Chrysler, Ford, Mazda, Mercedes, Nissan, and Toyota. Essentially all FFVs today are E85 vehicles , which can run on a mixture of up to 85 percent ethanol and gasoline. These vehicles are considered “dual fueled vehicles” under EPCA, which states that the label for dual fuel vehicles must: ‘‘(A) indicate the fuel economy of the automobile when operated on gasoline or diesel fuel; (B) clearly identify the automobile as a dual fueled automobile; (C) clearly identify the fuels on which th e automobile may be operated; and (D) contain a statement informing the c onsumer that the additional information required by subsection (c)(2) of this section is publishe d and distributed by the Secretary of Energy.’’ 130

130 49 U.S.C. 32908(c)(3).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 79 of 339 The current labeling requirements for dual-fu eled vehicles are c onsistent with these requirements. While not required, manufact urers may voluntarily include the fuel economy estimates (and estimated annual fuel cost s) for the alternativ e fuel on the label, in addition to the gasoline information. 131 Consumers can view the gasoline and E85 fuel economy estimates of all FFVs in the Fuel Economy Guide and at www.fueleconomy.gov . In fact, EPCA requires that the Fuel Economy Guide contain information such as: (1) the fuel economy wh en operating on the alte rnative fuel, (2) the driving range when operating on the alternative fuel, and (3 ) information about how the performance might change when operati ng on mixtures of the two fuels. EPA did not propose changes to these requi rements in the 2006 labeling rule and did not seek comment on the topic. Howeve r, EPA received late public comments from several environmental and consumer groups ur ging EPA to require additional information on the use of E85 on FFV labels. Since EPA did not propose a nd request comments on this topic in the 2006 rulemaking, the agency did not finalize any such requirements. EPA and NHTSA request public comment on three options for FFV labels. One option is to make no changes to the current requirements for FFV labels and continue to use fueleconomy.gov and the Fuel Economy Guide to provide information on E85 use to consumers. 132 Consistent with the current requirements, EPA and NHTSA would finalize regulations that would allo w manufacturers to di splay the E85 fuel economy values on the label on a voluntary basis. 133 The final regulations would include a template for such a label. A second option is to require the additi on of E85 fuel economy values to FFV labels using the units of miles per gallon. Since E85 has a lower energy density (i.e., about 25% less energy per gallon) than gasoline, this mean s that, other things being equal, an FFV will have a lower fuel ec onomy on E85 than it will on gasoline. EPA recognizes that this does not mean that ethanol is a “less efficient” fu el than gasoline; in fact, FFVs are typically slightly more efficien t on E85 than on gasoline in terms of miles per unit of energy. Accordingly, one approach under this option would be to add text such as the following wording on the label th at conveys this message: “While the E85 MPG values are lower than the gasoline MPG values, the use of E85 is typically slightly more energy efficient than the use of gaso line.” Under this option, it would also be possible to add E85 values for CO 2 emissions (an FFV typically emits slightly less CO 2 per mile on E85 than on gasoline) and fuel co sts (an FFV typically costs somewhat more to operate on E85 than gasoline, though this can vary by region). If CO 2 values are not

131 40 CFR 600.307-08(b)(14). 132 Consumers do get some information regarding E85 efficiency on a label required by the FTC. Currently the FTC label for FFVs displays the driving range on both fuels and some additional information regarding the use of alternative fuels. See 16 CFR Part 309. 133 Label examples for FFVs are shown in Section III, but these reflect only a transition of the currently used label content (some of which is required by statute) to the proposed label designs.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 80 of 339 shown, it would also be possible to include a statement such as “Using E85 uses less oil and typically produces less CO 2 emissions than gasoline.” A third option is to utilize the concept of miles per gallon of gasoline-equivalent (MPGe), which is a way to quantitatively accoun t for the slightly higher miles per unit of energy that an FFV achieves on E85 relative to gasoline. Because a gallon of gasoline has about 33 percent more energy than a gall on of E85, this means that an E85 MPG is multiplied by about 1.33 to convert it to a MPGe value. For most current FFVs, an E85 MPGe value will be slightly higher than the gasoline MPG value. The E85 MPGe value could be in place of, or in addition to, an E85 MPG value. As with the second option above, CO 2 and fuel costs values for E85 could also be included. The Federal Trade Commission (FTC) curren tly requires the use of a label that displays the cruising range of FFVs and other alternative fuel vehicles. If the agencies finalize one of the options to include E85 in formation, and the FTC de termines that that information is duplicative with its own info rmation, it opens up the possibility that the FTC might review its requirement. One remaining issue with FFVs is the methodology for assigning an overall combined value for greenhouse gas or fuel economy-based ratings or for any other metrics for which a single “merged” value is shown, given that two different fuels can be used. There is empirical evidence that appr oximately 99% of all FFV owners currently use gasoline rather than E85 fuel. Given this, the agencies propose, as a default, to base any merged values for FFVs on the assumption that the vehicle is operated on gasoline 100% of the time. However, if a manufactur er can demonstrate that some of its FFVs are in fact using E85 fuel in use, then th e merged values can be based in part on E85 performance, prorated based on the percentage of the fleet using E85 use in the field. This approach is consistent with that us ed for vehicle GHG emissions compliance under the joint EPA/DOT standards for 20 16 and later model year vehicles. 134 The agencies seek comment on applying the same approach here. 2. Compressed Natural Gas Vehicles EPA regulations currently provide a la bel template for vehicles operating on compressed natural gas (CNG), and there is on e major manufacturer currently selling a natural gas vehicle in selected markets. Given that a CNG vehicle is a single-fuel vehicle, EPA believes that the label desi gns developed for conventional or other alternative fuel vehicles can be easily adapted to gaseous-f ueled vehicles, as has been done in the past. In fact, EPCA provided specific instructio ns regarding how to determine the fuel economy for dedicated altern ative fuel vehicles such as gaseous-fueled vehicles. The statute states that for dedica ted automobiles the fuel economy “is the fuel economy for those automobiles when opera ted on alternative fuel, measured under section 32905(a) or (c) of this title, multiplied by 0.15.” 135 Section 32905(c) applies to gaseous-fueled vehicles, a nd it requires the following:

134 75 FR 25433, May 7, 2010. 135 49 U.S.C. 32908(b)(3).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 81 of 339 “For any model of gaseous fuel dedicated automobile manufactured by a manufacturer after model year 1992, the Administrator shall measure the fuel economy for that model based on the fuel content of the gaseous fuel used to operate the automobile. One hundred cubic feet of natural gas is deemed to contain .823 gallon equivalent of natura l gas. The Secretary of Transportation shall determine the appropriate gallon equi valent of other gaseous fuels. A gallon equivalent of gaseous fuel is deemed to have a fuel content of .15 gallon of fuel.” 136 This methodology is currently specified in EPA regulations. Note that 32905(c) applies a factor of 0.15, which is essentia lly a “credit” that increases the fuel economy of gaseousfueled vehicles by a factor of about 6.7 fo r the purpose of CAFE calculations. But the statute recognizes that incor poration of this cred it factor in the label values is not appropriate, hence the provision in 32908(b )(3) to multiply the 32905(c) result by 0.15, thus removing the credit value and resulting in an appropriate real-w orld label value. The current EPA regulations interpret the statute as requiring that the label for CNG vehicles display a gasolin e-equivalent value, and a label template for CNG is provided in the current regulations. 137 As can be seen, the curre nt label for CNG vehicles is fundamentally the same as for gasoline ve hicles, except that the fuel economy values are described as “gasoline equivalent” values, and the estimated annual fuel cost is based on a combined city/highway gasoline equivalentvalue and the price per gallon equivalent of CNG. The current label also contains te xt that reads “This ve hicle operates on natural gas fuel only. Fuel economy is expresse d in gasoline equivalent values.” We are therefore proposing that labels fo r CNG vehicles be essentially the same in terms of content and appearance as those proposed for conventional vehicles, with only a few exceptions. First, where the proposed labe ls indicate the fuel type, labels for CNG vehicles would state “Compressed Natura l Gas Vehicle.” Second, the fuel economy value(s) would be stated as gasoline-equivale nt values. As is the case for the proposed labels for electric vehicles, the CNG labels w ould indicate the conversion factor that is used to determine the gasoline equivalent values (0.823 gallons-equivalent per 100 cubic feet of CNG, as required by statute). 138 Third, the estimated annual fuel cost would be calculated using the combined city/highway ga soline equivalent value and the cost per gallon equivalent of CNG. The use of gasolin e-equivalent gallons is appropriate because this is how CNG is dispensed, priced, and sold at current CNG fueling stations. Finally, because the cruising range of CNG vehicles is typically limited relative to conventional vehicles, we are proposing the a ddition of cruising range to th e CNG vehicle label (in this way the label would mimic the electric vehicl e label). As is the case with electric vehicles, we believe that range is a key pi ece of information for the consumer who is considering a CNG vehicle. Other informa tion on the label, such as the greenhouse gas

136 49 U.S.C. 32905(c). 137 Appendix IV to 40 CFR Part 600, Sample Fuel Economy Labels for 2008 and Later Model Year Vehicles. 138 49 U.S.C. 32905(c).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 82 of 339 and other pollutant emissions and ratings, w ould be determined from emission and fuel economy test results and the proposed calcula tion methodologies as is the case for all vehicles. Section III presents the proposed and a lternative label designs, including a proposed design for CNG vehicles. We reque st comment on the proposed approach for CNG vehicles, and whether there is additional information specific to CNG or alternative fuels that should be on the label. 3. Dual Fuel Natural Gas & Gasoline Vehicles Although there is currently a template for dual fuel CNG/gasoline vehicles in the existing regulations, there are no manufactur ers that are currently manufacturing new vehicles that run on CNG and on gasoline. 139 Thus we request comment on whether there is a need to develop a template for these vehicles based on the new labels. The agencies envision that such a label would be based largely on the proposed approach for dual fuel gasoline/ethanol vehicles discusse d in above, in that the fuel economy and related information for both fuels w ould be displayed on the label. Although this proposal addresses most curr ent technologies, it does not need to address every possible fuel and technology combination either in existence or that may emerge in the future. EPA has the authority to prescribe test proce dures and label content for vehicles that are not speci fically addressed by the regula tions, and expects to do so on an as-needed basis to addre ss new technologies and fuels. 140 In fact, EPA expects to exercise this authority with respect to labels for electri c vehicles and plug-in hybrid electric vehicles that arrive on the market before the 2012 model year. 4. Diesel Fueled Vehicles EPA proposes to continue to calculate the fuel economy of diesel vehicles in miles traveled on a gallon of diesel fuel. Dies el fuel has a long history of being sold on a volumetric basis, and the energy content di fference between a gall on of gasoline and a gallon of diesel fuel is relatively small. III. Proposed Revisions to Fu el Economy Label Appearance This section presents and requests comment on three label designs. The agencies are co-proposing Label 1 and Label 2 design op tions, m eaning that the agencies currently expect to finalize one of the two options. A third label design is being presented as an alternative on which the agencies are requesti ng comment. All of these designs take into account and meet the variety of statutory requi rements in EPCA and EISA as discussed in Section I. It is important to note that although all of the label designs shown in this section make use of color to varying degrees, this Federal Re gister notice is capable of

139 Some aftermarket fuel conversion companies offer such vehicles, but EPA regulations do not currently require fuel economy labels for aftermarket fuel conversions. 140 40 CFR 600.111-08(f) (test procedures) and 40 CFR 600.307-08(k) (label format requirements).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 83 of 339 only displaying gray-scale versions. Full color versions can be viewed and/or downloaded from the docket (search for docket number EPA-HQ-OAR-2009-0865 141 or docket number NHTSA-2010-0087 at www.regulations.gov ) or from the agencies’ web sites where all information related to this action will be posted ( http://www.epa.gov/fueleconomy/regulations.htmand http://www.nhtsa.gov/fueleconomy). To the extent possible this section will describe the use of color on the labels, but interested parties should view the color versions to understand th e full effect of the label designs. Each design family consists of a set of la bels applicable to an array of vehicle technology/fuel types. Specifi cally, we show label examples that apply to conventional vehicles (that is, vehicles operating on a singl e fuel with internal combustion engines or hybrid electric drive), flexible-fuel vehicles (for example gasoline-ethanol), compressed natural gas vehicles, electric vehicles, and pl ug-in hybrid electric ve hicles. Each label family could be readily adapted to accommodate additional vehicle technologies or fuels, such as vehicles powered by fuel cells or other upcoming technologies. The agencies intend to finalize a label family with a consistent look and feel across vehicle types, in the belief that such consistency will most effec tively allow for recognition of the label as well as comprehension of its content. The agencies found through the focus groups and expert panel that many consumers will view the fuel economy label qui ckly, some using it to confirm the vehicle information they have previously researched on a manufacturers’ website or a third party website such as Consumer Reports or Edmunds .com. Other consumers, in contrast, will view the fuel economy information for the fi rst time when they visit a dealer lot or showroom. While a new vehicle purchase re presents a significant financial outlay, the agencies learned through their research that consumers like it simple, and do not necessarily act on details. Therefore, while the agencies want and need to add certain pieces of information to meet statutory requirements and to help consumers make informed decisions about the fuel consum ption and environmental impacts of their vehicle choices we must balance these objectiv es with the need to keep the new labels consumer friendly. To accomplish this, the agencies were guided by a set of core principles in designing these labe ls. The labels should:

 Create an immediate first impression for consumers

 Be easy to read and understand quickly

 Clearly identify vehicle technology (conventional, EV, EREV, PHEV)

 Utilize color

 Chunk information to allow people to deal with “more information”

 Be consistent in content a nd design across technologies

 Allow for comparison across technologies

 Make it easy to identify the most fuel efficient and environmentally friendly vehicles

141 See Memorandum from Roberts W. French, Jr. to EPA Docket # EPA-HQ-OAR-2009-0865, “Color versions of labels proposed by EPA and DOT in Notice of Proposed Rulemaking “Revisions and Additions to Motor Vehicle Fuel Economy Label,” August 26, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 84 of 339 The agencies are requesting comment on both the design and content of each label. Design issues are se lf-evident on the labels as pr esented, and we seek comment on the design aspects of each label family, incl uding format, color, font, and graphical elements. Content issues have been exte nsively discussed thr oughout the preamble; for illustrative purposes, presentation of content varies somewhat from one label family to another and we seek comment on the various approaches. Specifically, we seek comment on the layout, prominence, and grouping of labe l elements in terms of clarity, apparent relative importance, responsiveness to consumer information needs, and effectiveness at meeting public policy goals. These sample labels do not present every possible configuration of each label; for example, gas gu zzler information is not depicted, as it is utilized on only a small subset of labels. The final rule will provide specific templates for these unique cases. Detailed specifications for presenting all required label information will be included in the regulations. Although we will finalize labels with a uniform look and feel, commenters should not view the content of the labels below as be ing necessarily tied to one label design. For example, just because Labels 1 and 3 for PH EV are the only labels that display the allelectric range for a PHEV does not mean that the information could not be incorporated into Label 2 or into other label designs. We are interested in comments that relate both to content that should be on the label, how it should be communicated, and what overall label presentation is most eff ective and consumer friendly. Finally, please note that a lthough the agencies have made every effort to make these labels as realistic as possible and to ensure that the values on each label are internally consistent, the labels presented here should be considered examples that are not intended to represent real automobiles. A. Proposed Label Designs The agencies are proposing two label designs, presenting both designs as equal “co-proposals” but expecting to finalize only one design based on public comments and other information gathered after the proposal. Although th e two designs shown below have fundamentally different visual appearan ces and will no doubt elicit very different reactions from some viewers, they essentiall y present exactly the same basic information. For conventional vehicles, for example, each design displays the following:

• City MPG

• Highway MPG

• Combined gallons/100 miles

• CO 2 grams per mile (combined city/highway)

• Estimated annual fuel cost

• Range of fuel economy within the class

• The fuel the vehicle uses

• Three “slider bars” showing the performan ce of the labeled vehicle relative to other vehicles for MPG, CO 2 , and other air pollutants

• Annual fuel cost assumptionsFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 85 of 339 • A symbol that can be read by a “‘ Smartphone”’ for additional consumer interactions (i.e., a “QR” Code)

• A Fuel Economy Guide statement

• EPA, DOE, and DOT logos 1. Label 1 Label 1 is fundamentally different from Label 2 and 3 designs presented in this section in three different ways:

 First, the orientation is a portrait orientation, rather than the landscape style of the current label.

 Second, a rating reflecting the energy effi ciency and environmental impacts of the vehicle is given overall prominence. Instead of providi ng a series of numbers on the label with varying or equal prominence, which may make it difficult for consumers to evaluate at a glance, this label presents the energy and environment rating as a letter grade (a system familiar to all consumers) with major prominence at the top of the label. The letter grade is simply another familiar scale on which to pres ent a linear rating, comparable to the star system or a 1-10 rating. This grade would be based on CO 2 emissions and fuel economy consumption as described in Section II. To further help consumers identify the grade of a vehicle on the dealer sales lot, the agencies are proposing that different colors be used to differentiate between grade “families.” In other words, the dominan t color on all the “A” grade labels would be one color, the “B” grade labels would use a different color, and so on. For example, the circle which surrounds the letter grade would be a different color depending on the grade. The color versions of the labels demonstrate this, using green for A grades, yellow for B grades, orange for C grades, and a dark orange for D grades.

 Third, this label provides new fuel co st savings information not seen on any other label designs. Secondary only in prominence to the le tter grade, and immediately below the letter grade, Label 1 would display the 5-year fuel cost of the vehicle in comparison to the aver age vehicle. For vehicles with fuel economy ratings above the median vehicl e, the label would display how much the consumer would save, and for vehi cles with ratings below average the label would display how much more the consumer would be spending. All the remaining information is displaye d in the bottom portion of the label and would be available to consumer s who want to know the more detailed information or who take a more analytical approach to evaluating the vehicle. The agencies believe that this approach uses a rating system that is easily understood by consumers and that would dramatically simplify the process of ev aluating the overall energy efficiency and environmental impacts of the vehicles they are considering. The de-emphasis of MPG on this label – indeed, one purpose of directing consumers to the overall rating – is intendedFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 86 of 339 to enable consumers to make the best fu el consumption and environmental choices, choices made easier by the addition of the co mparative cost information. Additionally, a consumer that uses the letter grade and cost information on this label may be able to avoid the effect of the “MPG illusion” described in Section II.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 87 of 339 Figure III-1. Label 1 for gas/diesel vehicle, B grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 88 of 339 Figure III-2. Label 1 for electric vehicle, A+ grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 89 of 339 Figure III-3. Label 1 for PHEV, A grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 90 of 339 Figure III-4. Label 1 for gas/diesel vehicle, C grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 91 of 339 Figure III-5. Label 1 for gas/diesel vehicle, D grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 92 of 339 Figure III-6. Label 1 for PHEV, Option 2.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 93 of 339 Figure III-7. Label 1 for CNG vehicle, A- grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 94 of 339 Figure III-8. Label 1 for FFV, B grade.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 95 of 339 Option 2 for the PHEV version is offered as an alternative representation of plugin hybrid electric vehicles. This option was developed to be consistent with other dualfuel vehicle labeling approaches . It also provides an exam ple of how more information about the different modes of operation for PHEVs could be displayed on Label 1. The agencies seek comment on whether this altern ate approach to PHEV labeling for Label 1 provides better information for consumers or whether the first option is more useful. 2. Label 2 Label 2, shown below takes a more traditional approach, similar to the current fuel economy label and highlights the key me trics of MPG and annual fuel cost. The agencies are seeking comment a bout whether, if this label we re finalized, the prominence of gallons per hundred miles should be gra dually increased on the label through one or more rulemakings to facilitate consumer fa miliarity with and usage of a consumption metric. As explained in Section II, these la bels show the combined city/highway MPG with the highest prominence. The additional ra tings are essentially identical to those of Label 1, except with the additional space for th e MPG rating “slider bar.” Because of this extra space for the slider bars, Label 2 can also display the range of fuel economy of the applicable vehicle class (Label 1 provides this information in text form) in the context of the range of fuel economy for the whole fleet. Label 2 uses the slid er bar approach like Label 1 for all of the specific ratings, and, like Label 1, has separa te ratings for MPG, greenhouse gases, and other air pollutants. The electric vehicle label in this series does have an additional piece of in formation relative to Label 1 -- the battery charging time. And unlike Label 1 and Label 3, the PHEV labe l in this series provides separate annual cost estimates for both the electric and gas modes of operation, which may be more useful to consumers who want to understa nd the costs specifically associated with operating the vehicle solely on mode either when operating on electric ity or in gas-only operating mode.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 96 of 339 Figure III-9. Label 2 gas/diesel vehicle.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 97 of 339 Figure III-10. Label 2 for electric vehicle.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 98 of 339 Figure III-12. Label 2 for PHEV (predominantly blended type). Figure III-11. Label 2 for PHEV, ex tended range electric (series) type.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 99 of 339Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 100 of 339 Figure III-13. Label 2 for CNG vehicle.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 101 of 339 Figure III-14. Label 2 for FFV.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 102 of 339 B. Alternative Label Design (Label 3) The agencies also seek comment on a th ird label design that includes the same information as the other labels, but displa ys alternative ways of communicating the information. For example, this label (Lab el 3) combines the greenhouse gas and fuel economy ratings into one slider bar using a 1-10 rating scal e (rather than the absolute values used in the other label designs), and in stead of a relative “slider bar” scale for the other air pollutant rating, Label 3 uses a star rating system. Other than the difference in the rating systems, the Label 3 electric vehi cle label provides e ssentially the same information as Label 2. For PHEVs, Label 3 provides only one annual fuel cost number (like Label 1) that merges the electric and gaso line modes. This label also displays for PHEVs an all-electric range, if the ve hicle is capable of such operation.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 103 of 339 Figure III-15. Label 3 for gas/diesel vehicle.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 104 of 339 Figure III-16. Label 3 for electric vehicle.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 105 of 339 Figure III-17. Label 3 for PHEV, extended range electric (series) type.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 106 of 339 Figure III-18. Label 3 for PHEV, predominantly blended type.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 107 of 339 IV. Agency Research On Fuel Economy Labeling As discussed above, the fuel economy la bel m ust contain certain pieces of information by statute, and may additionally contain other pieces of information considered helpful to consumers. Given that all of the label information must be presented so as to maximize usefulness a nd minimize confusion for the consumer, EPA and NHTSA embarked upon a comprehensive res earch program beginning in the fall of 2009. Developing an effective label – one that conveys the required and desired information to consumers so that they can understand and use it to make decisions-- involves some inherent subjectivity, since what is understandable and useful for one consumer may be confusing or unhelpful to a nother. To better ground our proposed label designs in actual human responses, the agen cies set out to bette r understand the following general issues: whether, how, a nd to what extent consumers use the current fuel economy label in the vehicle purchase pr ocess; the barriers to consum er understanding of the fuel efficiency of vehicles relative to one anot her (including both conve ntional vehicles and advanced technology vehicles); and how a newly redesigned la bel could most effectively convey information to consumers on fuel economy, fuel consumption, fuel cost, greenhouse gas, and other emissions. When EPA last redesigned the fuel economy label in 2006, consumer research was valuable in helping to inform the development of that label. 142 Since today’s proposal includes adding important new elements to the existing labe l as well as creating new labels for advanced technology vehicl es, EPA and NHTSA embarked on a more comprehensive consumer research program than that undertaken in 2006 and have used this research to help develop th e labels proposed in this NPRM. A. Methods of Research To gather infor mation about the topics described below, the agencies designed a research plan including a review of literature on the vehicle buying process, three sets of focus groups in four different cities, a day-long facilitated co nsultation with experts in the field of shifting consumer behavior, and an in ternet survey of res ponses to proposed label designs (which will occur during the comment period following this NPRM). A more thorough discussion of each research method is provided below. 1. Literature Review EPA and NHTSA conducted a review of th e existing literature to understand the vehicle buying process. Specifically, the lite rature review addre ssed the sources of information that consumers use to research vehicles, their decision-making process, and the factors that influence which vehicles consumers choose to buy. These include vehicle-specific factors such as price, fuel ec onomy, and safety, as well as the role that demographics and psychographics play in pur chasing decisions. Literature examining consumer attitudes toward buying more fuel e fficient and environmentally friendly (i.e.,

142 The current label was redesigned and implemented for model year (MY) 2008 vehicles. See 71 FR 77871-77969 (Decem ber 27 2006).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 108 of 339 “green”) vehicles was also reviewed. Unde rstanding when and how consumers consider fuel economy and the environmental impact in their vehicle purcha se decisions helped the agencies determine the most effective ways to provide useful information to consumers on the vehicle label. Additionally, the literature review re port included an overview of existing educational campaigns aimed at helping consum ers use information on the fuel efficiency and the environmental effects of their transp ortation choices. Review of these campaigns may help inform the agencies’ development of educational tools and messages beyond the label to provide consumers with us eful information on fuel efficient and environmentally friendly vehicles. A broad range of sources were reviewed for this report, including journals in marketing, economics, and transportation re search; business magazines; government documents; conference proceedings; and a variet y of websites. Some of the key findings from the literature review are described in Section IV.B. A more detailed report is available in the docket. 143 2. Focus Groups The agencies felt it was critical to consider understandab ility and consumer reaction to a variety of label concepts given that the purpose of the fuel economy label is to inform consumers of the vehicle’s fuel economy and, with the amendments enacted by EISA, greenhouse gases and other emissions. EPA and NHTSA additionally saw a need to conduct research beyond that of the previ ous rulemaking due to the advancements in vehicle technology underway, the increased market share of vehi cles that use fuels other than gasoline, and th e introduction of environmental in formation to the label. The agencies determined that they would gather in-depth, qualitative feedback about fuel economy labeling, potential new label info rmation, and ways of displaying the information through focus groups. The focus group format allowed for in-depth probing around a variety of topics, including comprehe nsion of potential elements on the fuel economy label and how consumers may use that information in making purchase decisions. The focus groups were not intende d to provide quantita tive results, but were instead designed to help EPA and NHTSA dis cern the subtleties of the large number of decisions that are necessary when creati ng a label that should convey numerous and sometimes complicated information. The focus group process included a recrui tment screener, on-line pre-focus group survey, and at least two gender-differentiated focus groups in four different cities for each of the three separate phases. The focu s group methodology and results, including the recruitment screener and pre- focus group on-line surveys, are discussed in greater detail in the focus group Technical Memoranda av ailable in the public docket for this rulemaking. 144

143 Environmental Protection Agency Fuel Economy Label: Literature Review, EPA420-R-10-906, August 2010. 144 EPA-HQ-OAR-2009-0865.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 109 of 339 The agencies concluded that conducting th ree phases of focus groups, each with a different concentration, was necessary to ga ther adequate information to explore the complex and numerous issues raised by this rulemaking. Phase 1 gathered qualitative information on consumer understanding and us e of the current fuel economy label, consumer reaction to potential new informati on and metrics on the label for conventional vehicles, and also initial iden tification of effective displays for this information. Phase 2 asked consumers to identify what information they were interested in seeing on the label for advanced technology vehicles and explor ed the understandability and sufficiency of various information and metrics for PH EVs and EVs. Phase 3 explored the understandability and usefulness of new inform ation integrated into whole label designs for both conventional and advanced technol ogy vehicles. Thus, overall, focus groups were used to obtain a qualitative underst anding of consumers’ comprehension and reactions to fuel economy label information. The agencies assumed that individuals who had recently purchased vehicles would have the best insight into how the cu rrent fuel economy label is used and would therefore also be best suited to provide input about any change s that might be made to the label. To that end, participants were select ed based on having purchased a vehicle within the past year, but not during the “cash for clunkers” purchase window. 145 A “participant screener” was used to ensure a reasonable cr oss-section of purchasers was represented in each group. Some of the demographic varia tions purposefully considered included the type of new vehicle purchased, price range of the new vehicle, average daily driving distance, and whether the indi vidual had seriously considered or actually purchased an advanced technology vehicle su ch as a gasoline hybrid. Each focus group participant was also as ked to complete a short on-line survey before attending the session. This survey served three purpos es: 1) to collect demographic data about the participants a nd information about their specific vehicle purchase process; 2) to provide participan ts with some background information about advanced technology vehicles so that the participants would have some exposure to new technologies prior to the focus group meeting; and 3) to gather information about how the participants had used the current fuel economy la bel in their purchase decisions, if at all. This survey data was not intended to be ex amined as a nationally representative sample and was only used as supplementary information when describing the focus group results. The agencies anticipate that there will be additional focus groups prior to rule finalization in each of the four cities wher e focus groups were held pre-proposal. These focus groups will examine revised labels base d on feedback the ag encies receive during the comment period and will provide additi onal input on whole label designs. The agencies will place information obtained from these focus groups in the docket as it

145 “Cash for Clunkers” (Consumer Assistance to Recy cle and Save Act of 2009, Pub. L. 11132) was a NHTSA program that provided a tax incentive to trade- in low fuel efficient vehicl es for new, higher fuel efficient vehicles. The purchase period in which this program operated was excluded to avoid any bias of participants, since the program was explicitly focused on fuel economy.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 110 of 339 becomes available and encourages all intere sted parties to check the docket for updated information. 3. Internet Survey While the focus groups were used to de velop new label designs, the internet survey is meant to examine how understandabl e the new label designs are, and whether the proposed new label and alternative labels will improve consumers’ knowledge about more efficient vehicles. The planned survey is scheduled to begin concurrent with the signing of this proposal and will test these questions for both conventional and advanced technology vehicles. A notice of the surve y, published in the Federal Register on May 12, 2010, requested comment on the survey methodology. 146 No substantive comments were received. This survey will use two samples: self-selected U.S. new vehicle purchasers and people who expressed an intention to purchas e a new vehicle by requesting a price quote from a dealer. 147 Each of these samples is divided into three separate groups. One version of the survey was developed for each group, identical in every way except that each of the groups will see only one of the label designs. The survey tests respondents’ understanding of the labels by showing each respondent a series of label pairs. In each pair, all vehicle characteristics are held constant except the information on the vehicl e label. For instance, the fuel economy of the vehicles may differ, or one may have a conventional vehicle and one an electric vehicle. Respondents are then asked to identify which vehicle is better to use for trips of specified distances. 148 The key metric of interest is whether the label designs produce statistically significantly differe nt results. If one label pr oduces more correct responses than other labels, then it can be considered more unders tandable; if the labels do not produce statistically different results, then the labels can be considered equivalently understandable. To test the potential influence of the labels on vehicle purchases, respondents see pairs of labels for vehicles with all vehicle attributes constant ex cept those varied on the label, such as the technologies of the vehicles, their efficien cies, and their energy costs. Instead of using the label to identify the better vehicle for a scenario, the respondents are asked which of these vehicles they would pr efer to buy, based on th eir individual driving

146 U.S. EPA, “Agency Information Collection Activities; Proposed Collection; Comment Request; Internet Survey Research for Improving Fuel Economy Label Design and Content; EPA ICR No. 2390.01, OMB Control No. 2060-NEW,” 75 Fed. Reg. 26751 (May 12, 2010). 147 Sources of respondents were databases owned by Autobytel, http://www.autobytel.com (for those intending to buy new vehicles), and Focus USA (for those who purchased a vehicle in the last year), http://www.focus-usa-1.com. 148 Respondents were asked which was better, rather than which was more fuel-efficient or less costly, so as to leave the respondents with the choi ce of what information on the label to use for the comparison. A later question asked which information they used in their response. While this somewhat ambiguous approach may reduce the absolute number of co rrect answers to the questions, the goal is testing the relative effects of the labels, not the absolute effects.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 111 of 339 patterns. Comparisons involve both conven tional and advanced t echnology vehicles. Because the survey asks respondents about th eir typical daily driving distances, it is possible to see whether respondents chose the ve hicle better suited for their habits. The key variable is whether the responses differ for different label designs. The internet survey data collection is pl anned to occur in early to mid-August 2010. The results of the survey will be made public as soon as they are available. The results will be made availabl e in the public docket for this rulemaking at regulations.gov. If the results are not placed in the docket 30 days before the end of the comment period, the agencies will accept comments on these results up to 30 days from when they were placed in the docket. 4. Expert Panel In order to gather additional feedback on the label designs developed from the focus groups and to identify oppor tunities and strategies to provide more and better information to consumers so that they can more easily assess the costs, emissions, and energy efficiency of different vehicles, EP A and NHTSA convened an expert panel. “Experts” were selected based on their past experience in changing so cial norms either by successfully launching new products or leadi ng national education campaigns that have had a broad and significant impact. The me thod for selecting the panel began by first generating a list of products and social changes that met the criteria of impacting a significant percentage of the population quickly, while also demonstrating staying power. Individuals who had roles critical to the success of these effo rts were then identified and recruited. Nine “experts” participated on the panel, with experiences that included launching very successful public health camp aigns, internet sites, new technologies, and cable networks. The meeting was held from 9 A.M. to 3 P.M. in Washington D.C. on June 9, 2010. The topics covered include: background information, review and feedback on the EPA/NHTSA research process, messaging tec hniques, outreach strategies, and feedback on possible label designs. The Expert Panel is discussed in greater detail in the Expert Panel Report in the public docket for this rulemaking. 149 B. Key Research Questions and Findings The agencies identified the following key research questions, given the overarching issues provided above:

• How should labels portray inform ation a bout fuel consumption and fuel economy, fuel cost, greenhouse gas, and other emissions for consumers in a way that is most understandable and useful to them?

149 Environmental Protection Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908, August 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 112 of 339 • How should labels for advanced technol ogy vehicles portray information about fuel economy, fuel cost, greenhouse gas, a nd other emissions for consumers in a way that is most understandable and useful to them?

• How should the new labels be designed to meet the statutory requirements while best raising consumers’ understanding of fuel effi ciency, fuel cost and environmental impact?

• How can consumers compare vehicles when they are shopping?

• What purchase process do consumers currently use to make new vehicle purchasing decisions? Given this process, when are the most effective opportunities to communicate fuel econom y and environmental information? 1. Effective Metrics and Rating Systems for Existing and New Label Information How should labels portray information a bout fuel consumption and fuel economy, fuel cost, greenhouse gas, and other emissions for consumers in a way that is most understandable and useful to them? As described in Section I, EPCA and EISA require the fuel economy label to provide fuel economy, cost, and environmenta l information, as well as provide a means to compare vehicles based on fuel economy, greenhouse gases, and other emissions. The agency’s research program explored how this information might be displayed on the label in a useful and accessible format for consumers. a. Fuel Consumption and Fuel Economy EPCA requires the label to display th e “fuel economy of the automobile.” However, fuel economy, commonly thought of as “MPG” (the number of miles that can be traveled consuming one gallon of fuel) is often misunderstood by consumers. As discussed more extensively in Section II, because MPG is not linear, when people compare vehicles with different MPG values they are apt to incorrectly estimate the fuel savings of one vehicle over a nother. For example, switchi ng from a 15 MPG vehicle to a 20 MPG vehicle will save more fuel than sw itching from a 30 MPG vehicle to a 35 MPG vehicle. Thus, comparing vehicles based on MPG is not as helpful to consumers in making quick and accurate comparisons as consumers may believe it to be. Fuel consumption (the number of gallons of fuel consumed to travel a given distance), on the other hand, does yield the type of linear comp arison that consumers should find useful. Therefore, the agencies explored ways to convey fuel consumption on the label. Focus groups were instrumental in helping the agencies learn about communicating fuel consumption. Specificall y, Phase 1 focus groups set out to gauge how receptive consumers were to a fuel consumption value and whether there were particular presentations of that value whic h were more understandable. To do this the ‘Fuel Economy (MPG) Illusion ’ was introduced in the pr e-focus group on-line survey, followed by specific probing in each group around what “fuel consumption” means. Phase 1 focus groups generally responded th at it was the distance one can travel on aFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 113 of 339 gallon of gas (which is fuel economy, rather than fuel consumption). Following this discussion the participants were presented wi th four different de signs, each conveying fuel consumption and fuel economy informati on. The prominent value displayed within each design was fuel consumption, given in gallons per 100 miles while the less prominent value was fuel economy, given in miles per gallon. Even when participants demonstrated that they prope rly understood fuel consumption, most still indicated that they preferred miles per gallon over gallons per 100 miles. Participants indicated this to be the case even after the m oderator explained the ‘MPG I llusion.’ A few participants did indicate that viewing gall ons per 100 miles, instead of miles per gallon, might get them to switch to more efficient vehicle types. Some participants also said that they believed they would use the gallons per 100 mile fuel consumption information on the label to learn about the vehicle’s city a nd highway gas consumption and to compare between different vehicles in making th eir purchase decision. However, most participants were not enthus iastic about using the fuel consumption information. Almost all focus group participants showed a strong attachment to MPG. They like and use the city and highway MPG and ar e not familiar with gallons per 100 miles. If a new fuel consumption metric, such as ga llons per 100 miles, were added to the label participants would still want the familiar MP G metric to be prominent on the label. Recognizing that consumers believe they de rive significant value from MPG, but that consumption information may be more accurate and ultimately valuable to consumers, another approach to displaying fuel consump tion was also devised and presented to focus groups: an “annual gallons used” value. The ba sis for deriving this new metric was that 1) it makes the magnitude of comparing vehi cles based on consumption more apparent, and 2) it provides a clear link between the a nnual cost value and fuel consumption value. An annual gallons metric was also found to be one of the more effective ways to demonstrate the fuel economy illusion. While the agencies considered displaying the annual gallons of fuel information on the labe l we ultimately determined that the gallons per 100 mile metric should be introduced on the label as the new consumption metric, and that the introduction of the five year co st or savings information would also help consumers in overcoming the effects of the MPG illusion while also providing important additional information. Phase 1 focus group participants also eval uated four different graphical display options for fuel consumption and were aske d which was the most understandable design. Participants responded by identifying the desi gn they felt was simple, informative and in a familiar format. However, participants did not agree on which design accomplished this. The agencies further explored fuel ec onomy and fuel consumption designs in Phase 3 where focus group participants were asked to evaluate whole label designs encompassing both fuel economy and fuel cons umption values. In each of the three labels presented, the MPG value was a dominant metric. 150 For each design participants were asked to determine between two labels, which represented the more fuel efficient

150 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010. (Contains visual depictions of each of the Phase III label series.)Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 114 of 339 vehicle. Participants were also asked to identify what pi ece of information on the label they used to make this determination. Fuel consumption was rarely identified as being used by participants. Instead, participants used MPG and cost values most often. 151 In Phase 3, the agencies explored simplif ication of the labels by displaying on two of the three label designs only the combined (55% city and 45% highway) fuel economy value in lieu of listing the city and highway values separately. (See Section IV.B.4 for a discussion of whole label designs and why si mplification is perceived as an overarching goal.) When participants were probed about w hy they did or did not like certain label designs, the presence of city and highway valu es was often cited as a positive for a label design, and the absence of the city and highway values was cited as a negative for a label design. In addition, when asked how to improve the label designs, several focus group participants asked for the city and highway values to be a dded to the label designs that did not include them. The agencies gathered additional input on the most effective approaches for portraying fuel economy and fuel consump tion information during the expert panel meeting. After viewing three label designs, e xpert panel participants provided comments on how the label could be made more understa ndable and useful for consumers. The expert panel emphasized that in order to be effective, the fuel economy label should be simple and able to be understood by consumer s within a short amount of viewing time. To implement this goal, the expert panel s uggested that the agenci es develop a single, overall metric for vehicles that is easy fo r consumers to understand, such as a letter grade (A±, B±, etc.). 152 The expert panel also suggested that th e agencies consider redesigning the label such that the single metric is prominently featured on the top half, and any additional vehicle information and more specific metrics be included on the label in smaller font and in a less prominent location. The expert pane l stated that this a pproach would provide interested consumers with more detailed informati on without distracting from the simpler, overall metric that all consumers could easily understand. The rationale for this label design is that it can pr ovide useful comparative information to the consumer who may only glance at it, while also providing th e necessary details to those who want more in-depth information. Additionally, the expert panel suggested prominently featuring a website URL and a QR Code ® for smartphones to provide consumers with access to more detailed vehicle information elsewhere. 153 For example, the website and smartphone application might contain tools for consumer s to calculate the fuel economy they can expect based on their own driving habits or allow consumers to quickly compare fuel economy and consumption for different vehicle models. b. Fuel Cost

151 Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010, p.12. 152 Environmental Protection Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908, August 2010, p. 15-17. 153 Ibid.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 115 of 339 EPCA requires the fuel economy label disp lay the “annual fuel cost of operating the automobile.” Recognizing that some cons umers have previously appeared to distrust or dismiss annual costs as not representative of their own experience, EPA and NHTSA explored whether there were ot her cost units (such as cost per month, per mile, per week, etc.) that could be additionally provided that would be more meaningful to consumers. Throughout the focus groups in Phase 1 and 2, participants indi cated that they tended to dismiss the annual cost informati on on the current label because gas prices fluctuate and vary with location, and they do not drive 15,000 miles per year. 154 Nevertheless, Phase 1 focus group participants identified the estimated annual fuel cost as the second most used piece of information on the label. In addition, in Phase 2 focus groups, where participants were asked to create labels from scratch, most groups placed a cost value on the label. When cost values are used, focus group members indicated they used it as a comparative tool to evaluate the fuel efficiency of diffe rent vehicles. When asked what they thought about cost, focus group participants indicated they thought about the cost to fill a gas tank, the fuel cost over a period of time (daily, weekly, monthly, yearly, etc.), and the fuel cost over a given distan ce (cost per mile, 100 miles, 1000 miles, etc.). When Phase 1 focu s group participants were presented with a variety of cost units, the two most popular ch oices among cost units were annual cost and cost per month. However, in Phase 3, when pr esented with labels that displayed both a monthly cost and an annual cost, participants suggested that the m onthly cost value could be dropped. Participants in the expert panel meeti ng suggested that the agencies provide information on the savings consumers could ach ieve by purchasing a more fuel efficient vehicle. One expert panel pa rticipant noted that the current label designs demonstrate costs, but that it would be be tter to demonstrate savings, which tends to be a very strong motivator. 155 One approach to communicating this information on the label would be to display the savings a consumer might expect over five years by purchasing and driving a vehicle with a higher overall letter grade. c. Environmental Metrics Environmental information on greenhouse ga ses (GHGs) and other emissions has not been previously displayed on the fuel econo my label, so the agencies were interested in learning how a label might best convey to consumers information about the emissions impact of a new vehicle. The available literature on the imp act of “eco-labeling” vehicles is mixed. 156 Some of the research indicates that consumers may welcome an eco-label on

154 15,000 miles per year is the cu rrent annual mileage assumption used on all fuel economy labels to estimate the annual fuel cost of operating a vehicle. 155 Environmental Protection Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908, August 2010,p. 17. 156 Environmental Protection Agency Fuel Economy Label: Literature Review, EPA420-R-10-906, August 2010, p. 24.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 116 of 339 their vehicle, although they say that it is unlikely to impact th eir purchase decision. Through its consumer research, the agencies investigated what combination of metrics and ratings might be displayed on the fuel ec onomy label to provide this information in an effective and consumer-frie ndly way, including a stand-alone CO 2 performance metric, relative versus absolute rating systems, a comparison system, and an environmental certification mark. For the most part, Phase 1 focus group pa rticipants indicated that they did not research environmental information (beyond fuel economy) as part of the vehicle purchase process. While some participants indicated that they would use environmental information to compare different vehicles if it was placed on the fuel economy label the majority of focus group particip ants were indifferent to th e inclusion of environmental impact information on the label and indicated they were not likely to visit a website for environmental information. However, when pr esented with whole la bel designs in Phase 3 many respondents indicated that the environmental metric should be on the label, so that it is available for those who were interested. In Phase 1, participants were presented with four diffe rent environmental metric options and approaches to displaying envir onmental information, and were asked to rate the most understandable and l east understandable. Partic ipants stated that they understood the environmental information in ge neral, but did not understand what “grams of CO 2 ” meant. The display featuring a rating fo r other emissions in stars and grams of CO 2 numerically was most frequently chosen by Phase 1 participants to be the most understandable. Participants ge nerally favored presentations that showed information in a simple format, though there was no consensus on which format achieved this. In general Phase 1 and 2 focus group findings indi cate that we must keep environmental information simple if we want consumers to pay any attention to this information on a label. An overall environmental rating wa s most favorably received with the general reaction being that EPA was trusted to deci de how to combine environmental impacts into a single rating. Phase 1 focus groups were also asked if they recognized and knew what the “SmartWay” logo meant. None of the partic ipants recognized the logo. However, when probed, most ascertained that it was an EP A designation of some sort. While some participants indicated the logo may confer cr edibility to an envi ronmentally friendly vehicle, none indicated they would be less likel y to purchase a vehicle without the logo. In Phase 3 focus groups the agencies sought to examine further how environmental information might be displayed most effectively. Several permutations of graphical rating systems were shown to partic ipants. These included designs in which “greenhouse gases” and “other air polluta nts” were displayed as one combined environmental rating or separately. Rating scales were examined that were based on relative values, such as a “5 leaf” rating sy stem as well as a linear scale that had theFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 117 of 339 vehicle’s absolute CO 2 value identified on a scale that had end-points identifying the approximate highest and lowest emitting vehicles available. 157 The expert panel, when shown the labe ls designed by the agencies based on focus group input, stated that they neither underst ood the environmental information presented nor found it compelling. As described in S ection IV.B.4, the expert panel recommended developing an overall rating for vehicles, which could combine fuel economy and environmental impacts. The expert pa nel noted that additional metrics (e.g., CO 2 performance) could be included in a less pr ominent position on the label for consumers interested in more detailed e nvironmental information. Expert panel participants also suggested that environmenta l performance information could be made available on a website and accessed through the sm artphone interactive (QR Code ® ) featured on the label. 158 2. Effective Metrics and Ratings Systems for Advanced Technology Vehicles How should labels for advanced technol ogy vehicles portray information about fuel economy, fuel cost, greenhouse gas, and ot her emissions for consumers in a way that is most understandable and useful to them? In addition to the issues discussed ab ove for conveying information generally on labels, advanced technology vehicles that operate on fuels which differ from conventional gasoline and diesel fuel require new strategi es to communicate a nd display fuel economy information effectively. 159 Through the research program, we explored potential approaches to communicating useful fuel economy, cost, and environmental information about electric vehicles and seve ral variations of plug-in hyb rid electric vehicles. As discussed further below, the research pr obed consumers to identify what specific information they would need if they were to seriously consider pur chasing an advanced technology vehicle and what information w ould be most helpful on an advanced technology fuel economy label. 160 Phase 2 focus groups were devoted to exploring what label information consumers believed was most important to display for advanced technology vehicles given the limited space provided on the fuel eco nomy label. The focus group discussions were broken into segments based on three di fferent vehicle technol ogies: EVs, extended range PHEVS, and blended PHEVs. Focus group discussions thus se parated the different technologies in order to ascertain more accurate ly what information would be most useful to consumers to understand these new technolog ies. Phase 2 focus groups were tasked

157 See Environmental Protection Agency Fuel Economy Label: Phase 3 Focus Groups, EPA420-R-10-905, August 2010,. p. 39-40 for a detailed description of the metrics examined. 158 Environmental Protection Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908, August 2010, p. 15-17. 159 See Section III.B. and III.C. for a discussion of the challenges that advanced technology and other nontraditional vehicles present for consumers when making vehicle purchase decisions. 160 Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904, August 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 118 of 339 with “building” three different labels, each for different advanced technology vehicles and were given a large number of metrics from which to choose the building blocks. Almost all of the labels built by each focu s group included the following elements: (1) the range that the vehicle could travel while depleting a full battery, the charge depleting operation; (2) the length of time it takes to char ge the battery; (3) the cost of charging the battery, and if operating in two separate fuel modes, the cost associated with each mode of operation; and (5) an environmental metric. 161 When asked to identify the two most important pieces of information on the label, participants said, regardless of the city, gender, or technology discussed, that inform ation on the range an advanced technology vehicle can travel on a fully changed battery a nd the length of time is takes to charge the battery were the most important information th ey needed to have in order to seriously consider purchasing thes e type of vehicle. The expert panel’s label recommenda tions did not differentiate between conventional and advanced technology vehicl es. The recommendations they made for the conventional vehicle label would apply to the advanced technol ogy vehicle label as well. a. Range Focus group participants stated that for any vehicle that operates, even just part of the time, on electricity, it is important for them to know the distance the vehicle can travel on a fully charged battery. Participants saw this as vital to their understanding of the vehicle’s fuel economy. While Phase 2 fo cus groups expressed in terest in seeing the range displayed for both city and highway values, when Phase 3 participants were presented with full labels, no one asked for the range to be broken down by city and highway values. b. Fuel Cost Across all advanced technologies, participan ts were interested in battery charging costs. There was a fairly even split between cost per mile, annual cost and monthly cost values, regardless of technology. For any vehicle with a gasoline-only mode of operation, participants expressed a desire to see the cost expressed annually. The groups also indicated that labels for any vehicle th at operated in a combin ed gas and electric mode should provide cost information on an annual basis. In Phase 3, when presented with annual fuel cost and monthly fuel cost options, many participants used the annual fuel cost when comparing across advanced te chnology vehicles. Some indicated that the monthly cost was useful for these advanced technology vehicles. In particular, people equated the electricity consumption to th eir monthly home electricity statements. c. Fuel Consumption and Fuel Economy

161 Environmental Protection Agency Fuel Economy Label: Phase 2 Focus Groups, EPA420-R-10-904, August 2010. Appendix K.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 119 of 339 For any advanced technology vehicle that operates in a gas-only mode, the Phase 2 focus groups indicated a strong desire to se e fuel consumption expressed in miles per gallon. In any vehicle that had an electri c-only mode of operation, the focus groups favored seeing the electric consumption inform ation expressed in an MPG equivalent of “MPGs”. (See Section II.B for a detailed discussion of MPGe). The second most understandable metric of electric-only ope ration was kilowatt-hour per 100 miles, but many participants felt strongly that kilowatt hours are very unfamiliar and should not be chosen as a metric. For the PHEVs with a bl ended mode (gas and electric), focus groups were interested in seeing an MPGe that combined the MPGe of electric operation and the MPG of gas operation. In any vehicle that could operate in more than one mode of operation, such as an EREV or PHEV, partic ipants were interested in seeing fuel consumption values for each mode of operati on, although some were interested in seeing a consumption value for the two modes expressed in MPGe 162 in addition to displaying the separate consumption information. d. Environmental Information Focus group participants did not inde pendently identify the need to have environmental information on the label. Howe ver, in Phase 2, with the exception of one group, when given the option, all the groups elec ted to include environmental information on the label. Of the designs provided many part icipants selected a horizontal slider scale that ranked the vehicle’s impact as the mo st understandable conveyance of environmental information. Other displays of enviro nmental metrics were examined in Phase 3. These displays included sliding scales segmented with relative rating syst ems as well as those with absolute values. Relative ratings su ch as stars or leaves were also shown. Participants commented that they wanted so mething that was quick and easy to read. Most focus group participants preferred someth ing that was quick w ith little detail while some wanted more detailed information to help inform their decisions. Based on this finding, the agencies incorporated this approa ch into the co-proposed label designs in attempt to find the right balance of simp le and detail information presentation. See section IV.B.1 for more comprehensive disc ussion of the environmental information focus group findings. 3. Effective Metrics to Enable Vehicle Comparison How can consumers compare vehicles when they are shopping? Beyond the statutory requirement to deve lop rating systems for fuel economy, GHGs, and other emissions, with designations of the “best” vehicles in terms of fuel economy and GHG emissions, the agenci es recognize that the labels need to be consumer-friendly in terms of facilita ting cross-vehicle and cross-technology comparisons. If consumers first encounter ad vanced technology vehi cles on the dealer’s

162 Participants were given this option using existing utility factor data as the method for combing the two modes of operation. See Section VI.B for a discussion about utility factors.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 120 of 339 lot, and are not predisposed to buy one, a labe l that effectively conveys the benefits of purchasing such a vehicle through a clear a nd understandable rating system will be helpful in informing consumers and potentially educating consumers a bout the benefits of these vehicles. Through the research program, the agencies also investigated how the fuel economy labels might be designed so th at consumers could easily compare the fuel economy, costs, and environmental impacts acr oss a range of vehicle technologies -- from conventional gasoline and diesel vehicles to electric and pl ug-in hybrid vehicles. Focus groups also provided feedback about various me trics which were intended to help a consumer compare a vehicle to other vehicles, as required by statute. In Phases 1 and 3, participants were shown not only rating scales such as a numerical or five stars system, but also a slider scale similar to th e bar that exists on the current fuel economy label for within-class comparisons, both of wh ich the agencies believed would meet the statutory requirement to provide a rating system. The participants seem to be split into two camps: those that prefer the analytical deta il of the value scale, and those that prefer the simplicity of a star-type rating scale. For fuel economy and fuel consumption, Phase 1 participants were shown two kinds of examples: one that compared vehicl es only within their current fuel economy class, and one that showed both a within -class comparison and a comparison among all vehicles. These comparisons were shown using gallons per hundred mile values and miles per gallon values. The majority of partic ipants preferred the metric that showed the subject vehicle as it compared to all vehicles and as it comp ared to its fuel economy class in units of miles per gallon. In Phase 2 most focus group participants said that they woul d like an effective way to compare among disparate vehicle techno logies. Many settled on miles per gallon equivalent as a comparative metric, but mo st did not know what the equivalency was based upon. In Phase 3, when comparing advanced technology vehicles, most participants either used the MPGe value or the annual cost value to compare across vehicles. Some used the fuel economy rating sy stems that were provided. In general, the findings from the focus groups established no clear preference or approach for how to effectively communicate comparative vehicle in formation that would be useful to most consumers. The expert panel disagreed that the focus group generated labels could be used effectively to compare across vehicle technologi es-- especially to the level of information found on the advanced technology labels, wh ich they described as “scary” and “unfriendly.” They were clear to point out, however, that thei r issues were with the label design, and that they were not rejecting th e information contained on the label. The expert panel stated that there are inherent di fferences in reviewing labels in a focus group compared to on a dealership lot, where you ha ve, on average, very short viewing time. The expert panel suggested that processing th is amount of information quickly would be challenging, which could lead many consumers to tune out the label completely. As mentioned above, the panel recommended that the agencies roll up fuel economy, environmental impacts and cost information into a single easily understood letter/gradeFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 121 of 339 approach that will be intuitive for most consumers. The grade could be used across all technologies providing consumers easy compar ative information. The expert panel allowed that the more complicated informa tion could be made available in the bottom half of the label but argued that it would be crucial to retain a simple compelling comparison in the top portion of the labe l. The panel also suggested including a comparative metric that shows the potential savings from buying a more fuel efficient vehicle, as saving money historically has been a very strong motivator for consumers. 4. Effective Whole Label Designs How should the new labels be designed to meet the statutory requirements while best raising consumers’ unders tanding of fuel efficiency, fuel cost and environmental impact? In addition to the examination of indi vidual label elements described above, consumer research designed by EPA and NHT SA investigated the effects of various whole label designs on consumer comprehension and utilization, in order to test whether the labels would still be useful when all of the elements were put together. This inquiry is important because there is only so much space that information can occupy both on the label and in the consumer’s mind when standi ng on the dealer’s lot and confronted with so much other information. In order to provi de sufficient information while ensuring that it remains understandable for the greatest number of consumers, a balancing act is inevitable. The consumer research attempte d to assess how best the balance could be struck, as discussed further below in Section III. The expert panel offered very strong opi nions on what, given their experience, would make a label effectiv e in engaging the public. They strongly recommended that the top portion of the label contain only one element – a “grade” that would combine as many of our required metrics as possible. Th is information should be big, bold, and easy to process while walking around a dealership. The label space under the grade would be reserved for the specific information required in the statute or deemed important in focus groups and other market research. When the panel was presented with label designs that had multiple metrics, explanatory text, and graphical icons, with no one element standing out, they felt that the labels were confusing and intimid ating. The expert panel’s consensus view, after viewing the draft labe ls developed through the focus groups, was that these labels would be daunting for most consumers to process, making them inclined to “tune out” even the most basic information. Their strongest recommendation: Keep it simple. 163 5. Tools beyond the Label What purchase process do consumers currently use to make new vehicle purchasing decisions? Given this process, when are the mo st effective opportunities to communicate fuel economy and e nvironmental information?

163 Environmental Protection Agency Fuel Economy Label: Expert Panel Report, EPA420-R-10-908, August 2010, p. 15-17.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 122 of 339 a. Vehicle Purchase Process The vehicle purchase process is comple x and iterative. There may be many opportunities to inform consumers about the fuel economy and environmental impact of the vehicles they are considering. Although much of this proposal focuses on the actual fuel economy label, the agencies recognize th at consumers seek out fuel economy and environmental information at other times in the purchase process beyond simply viewing the fuel economy label on vehicles during visits to dealerships. In order to determine the most effective means to provide fuel economy and environmental information to consumers, the agencies sought to better understand when and how consumers encounter or search for this type of information in their vehicle purchase decision-making process. Information on this vehicle buying process was obtained in an on-line survey of focus group participants prior to the actual focus groups. In a ddition, at the start of each session, participants were asked to discuss th eir purchase process so we could better understand the nuances associated with the re sponses we had received through the on-line survey. The pre-group online survey indicated that a majority of respondents already had a vehicle type in mind when they began the process. Consumers appear to narrow the spectrum from all available ve hicles to the vehicle type or types they will research depending on their specific need s and interests. In general, the focus groups used broad categories to describe vehicl e groupings, such as SUVs, mi nivans, sport cars, trucks, economy cars, and midsize cars. 164 For example, some focus group respondents said they narrowed their search based on vehicle cargo space, for others it was sedans, and for others it was SUVs and minivans. According to the pre-focus group online survey and the focus groups themselves, a majority of the participants indicated that price/affordability was one of the top five factors that influenced their vehicle choi ce. Other key factors that influenced participants’ vehicle choice included gas mil eage/fuel economy, safet y, reliability, size, interior and exterior appear ance, comfort, brand name and performance. The agencies also reviewed existing literature on the factor s that influence vehicle choice. For example, a 2009 survey of people between the ages of 18 and 30 (“Generation Y”) found gas mileage to be the top factor indicated by part icipants as critical to vehicle purchasing decisions, followed by affordability/price. 165 Both demographic and psychographic factors (e.g., ‘what a vehicle says about me’) also play a role in the vehicle purchase process. 166

164 These categories are not necessarily related to th e current 14 EPA-designated classes of vehicles. Vehicle classes are described in 40 CFR 600.315-08. 165 Deloitte. “Connecting with Gen Y: Making the short list,” 2010, p.2. Available athttp://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/us_auto motive_Deloitte%20Autom otive%20Gen%20Y%20Exe cutive%20Summary_0107 .pdf (last accessed August 13, 2010). 166 Environmental Protection Agency Fuel Economy Label: Literature Review, EPA420-R-10-906, August 2010, p. 30-39.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 123 of 339 At present however, environmental impact s are not top purchas ing considerations for most consumers. Focus group participants indicated that environmental impacts were not a consideration in th e type of the vehicle they purchas e. Only a small fraction of the participants in the pre-group online survey c onsidered “low emissions” to be key factor when making a vehicle purchase decision. This finding is also supported by the literature review. Consumer research indicates that a lthough consumers have a growing interest in purchasing “greener” vehicles, environmental impact is not sufficient by itself for most consumers to be willing to pay a premium. 167 Another important aspect of the vehi cle purchase process is how consumers research vehicles. Two-thirds of the re spondents to the pre-fo cus group online survey reported they had researched fuel economy prior to buying their vehicle. Based on the available choices in the pre-focus group su rvey, respondents reported gathering fuel economy information from manufacturer webs ites, Consumer Reports, auto dealers, vehicle search websites, automobile magazines, others with similar vehicles, government websites, television advertisements, and the Fuel Economy label itse lf. The literature review found that consumers increasingly rese arch fuel economy information online. For example, traffic on the DOE and EPA we b site www.fueleconomy.gov increased from 400,000 user sessions in 1999 to more than 30 million in 2008. 168 Other Internet sources used to research vehicles during the purch ase process include consumer-to-consumer tools such as blogs and web forums. 169 Another finding from the literature review is that consumers are li kely to be closer to purchasing a vehicle by the time they visit the dealership than they were in the past. 170 This highlights the value of educational tool s beyond the label to pr ovide consumers with information on a vehicle’s fuel economy and environmental impact. Online tools may be particularly important. In addition to the Internet being a source of information for consumers, online sales of cars have been stea dily increasing in the U.S. in recent years (although they still represent a small percentage of total car sales). 171

b. Consumer Education As described above, the vehicle purchase deci sion is not based entirely on the fuel economy label information, but is complex and iterative, and messages presented in contexts beyond the label may be even more helpful in getting consumers the information

167 Ibid., p. 8. 168 Greene, D.L., Gibson, R., and Hopson, J., “Reducing Oil Use and CO 2 Emissions by Informing Consumers’ Fuel Economy Decisions: The Role for Clean Cities,” prepared by Oak Ridge National Laboratory, Oak Ridge, TN, August 2009, p.1. Available at http://www1.eere.ene rgy.gov/cleancities/pdfs/fuel_economy_stra t_paper.pdf (last accessed August 13, 2010). 169 Environmental Protection Agency Fuel Economy Label: Literature Review, EPA420-R-10-906, August 2010, p. 23. 170 Ibid., p.18-19. 171 Deloitte. “A new era: Accelerating toward 2020 – An automotive in dustry transforme d,” 2009, p.12.Available at http://www.deloitte.com/assets/DcomIndia/Local%20Assets/Documents/A%20New%20Era%20- %20Auto%20Transformation%20Report_Online. pdf (last accessed August 13, 2010).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 124 of 339 they need about fuel economy, fuel cost, GHGs, and other emissions. Several resources maintained by EPA and DOE are already availa ble to help consumers obtain information about comparative vehicle fuel economy and environmental information, including www.fueleconomy.gov, 172 the Fuel Economy Guide, 173 and the Green Vehicle Guide. 174 In addition to the information sources and tools already availabl e, under EISA, Congress requires NHTSA, in consultation with EPA a nd DOE, to develop a consumer education program to improve consumer understanding of automobile performance with regard to fuel economy, greenhouse gas and other emissions. While this campaign is still in its very ear ly stages and is not the subject of this rulemaking, it will be investigating modificati ons to existing tools, new collaborations for information dissemination and, potentiall y, new forms of media utilization in communicating the relationship of autom obile performance to fuel economy and emissions. Particularly given the changes to the label that we antic ipate will result from this rulemaking, introducing consumers to th e new information available to them and how it can be used as they consider their next vehicle purchase will be very important. Since the vehicle purchase process is multifaceted, EPA and NHTSA would like to better understand how various informati on tools beyond the label can provide critical fuel economy information to consumers. EPA and NHTSA especially seek to understand what additional types of consumer informa tion and tools are most important and what level of individualized information is n eeded by consumers in the future. There are a variety of existing education campaigns and resources to help enable consumers to make more fuel efficient a nd environmentally frie ndly transportation choices. These include the Federal Highway Ad ministration’s initiative “It All Adds Up to Cleaner Air, ” 175 the “Cleaner Cars for Maine” 176 program, and the “Drive Smarter Challenge” campaign. 177 Brief descriptions of these a nd other education campaigns are available in the litera ture review report. 178 Such campaigns may inform the agencies’ development of educational tools to help consumers make more informed vehicle purchasing decisions. The agencies request comment on ideas for the most effective means to educate consumers about the new elements and metric s being proposed on the label. In addition, EPA and NHTSA request specific comment on wh at additional tools we could provide to increase consumer comprehension about complex advanced technology vehicles and automobile performance related to fuel ec onomy and emissions. We are proposing that this campaign potentially include both traditional marketing mechanisms, such as brochures, public service advertisements, media placements, and dealership-distributed

172 http://www.fueleconomy.gov/. 173 http://www.fueleconomy .gov/feg/feg2000.htm. 174 http://www.epa.gov/greenvehicles/Index.do. 175 See http://www.italladdsup.gov (l ast accessed August 13, 2010). 176 See http://www.maine.gov/dep /air/lev4me/index.html (last accessed August 13, 2010). 177 See http://drivesmarterchallenge.org/ (last accessed August 13, 2010). 178 Environmental Protection Agency Fuel Economy Label: Literature Review, EPA420-R-10-906, August 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 125 of 339 checklists, along with more innovative appr oaches, which may include crowdsourcing with social media, interactive web site displays at dealerships that would allow consumers to “personalize” their fuel economy label, smartphone applications. In addition, per the recommendation of the expert panel, we are proposing to develop a web site that would be launched in conjunction with the new label. This consumer-focused, user friendly web site woul d provide more specific information on the label, along with access to the tools, applications, social media, and materials mentioned above. All messages and materials will be tailored according to the method of communication and the target audience. EPA is requesting comment on effective messaging, materials, and me thods of communication. V. Implementation of the New Label A. Timing As previously noted, the agencies are proposing that the new label requirem ents initially take effect with the 2012 model year. This regulatory acti on is scheduled to be finalized in late December of 2010 or January of 2011 with a final ru le effective 30 days after publication. This timing is similar to what was provi ded in the 2006 label rule. 179 Model year 2012 vehicles can be introduced as early as Janu ary 2011, and in fact EPA has already heard from at least one manufacturer that plans such an early introduction, Given that this regulatory action is not sche duled to be finalized until December of 2010 and that it is possible, based on when the final rule is published in the Federal Register for the effective date of th e new regulations to be a date in March of 2011 it is clear that not all of the 2012 model year can be captured by the proposed regulations. There may also be cases where a manufacturer prints label “blanks” early in the model year, even if they plan to introdu ce vehicles in the more typical time frame of late summer and early fall. Although the proposed regulations do not presume anything regarding the date of finaliza tion of the new label and only specify applicability to the 2012 model year, we expect that the final rule will have to take these i ssues into account. The final rule will likely specify a date of a pplicability of the new regulations that is some date certain after publication of the final rule that woul d allow manufacturers adequate time to plan for and implement the new designs. We believe that a date on the order of 30 days after publication would be appropriate, where vehicles produced after that date would have to use the new label format. We would of course encourage the voluntary use of the new label to the greatest extent possible fr om the date of signature to the specified effective date. The agencies request comments on the appropriate timeframe for implementing these new label requirements. The agencies recognize that some of the potential changes in la bel design, including color graphics that would be printed at production run-time and differing footprints that necessitate redesign of the overall Monroney la bel may impact the amount of lead time

179 See 40 CFR 600.301-08 and 71 FR 77879 (Decembe r 27, 2006).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 126 of 339 required by manufacturers. While we believe that it is extremely important for the final label changes to take effect as soon as po ssible, we seek comment on these specific potential lead time issues. To introduce the new label and ensure that the public understands the new information and format, the agencies plan to conduct extensive public outreach concurrent with the implementation of a fina l rule. We will provide information about the new label and how to use it via web-ba sed information, fact sheets, and other communication methods. This information will be designed to explain all aspects of the new label

B. Labels for 2011 model year advanced technology vehicles The new fuel economy label will address advanced technology vehicles, such as EVs and PHEVs, which some manufacturers are planning to introduce into the U.S. market prior to the 2012 model year. EPA i ssued regulations in 2009 that provided EPA discretion to authorize appr opriate changes to the curr ent fuel economy label with individual manufacturers, specifically with respect to advanced technology. 180 These regulations are applicable until this rule is finalized. To address labels for advanced technology vehicles introduced before this rule is finalized, EPA may allow any manu facturer of such vehicles that will be introduced prior to the 2012 model year to use one of the co-pr oposed labels, or an al ternative label that meets EPA’s approval. For example, EPA coul d evaluate whether a manufacturer could use a table that compares various metrics (e.g., fuel economy (mpg), electricity consumed (kWh), miles per gallon equivalent (mpg-e), a nd total energy cost) for different mileages the vehicle is driven between a full charge of the battery. This a pproach would provide the most complete amount of information fo r the vehicle's performance as a function of distance travelled. The broad ra nge of metrics could also make it easier for the consumer to understand the energy consumption of the ve hicle. The down side to including a table is that it provides a lot of information and could be potentially confusing for some consumers. Manufacturers intending to introduce an advanced technology vehicle as a 2011 model year vehicle should meet with EPA to discuss the details of actual implementation. For example, EPA would discuss with the manuf acturer the fact that the label format and information may only be used for the 2011 model year and may change for 2012 depending on the outcome of the final label regulations. EPA would also discuss in conjunction with the Federal Trade Commi ssion (FTC) what aspects of the label information could be advertised and would also discuss with the manufacturer the details of specific test values used, such as mile per gallon equivalent, kW-hr per 100 miles, blended mode operation for a PHEV, etc.

180 74 FR 61537, Nov 25, 2009.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 127 of 339 C. Implementation of Label Content Although much of the information presente d on the label is determined from test data specific to the labeled vehicle or can be codified in the regulations, there are elements that will require annual (or in so me cases, possibly less frequent) information provided by EPA. This is no different from today’s label and the annual guidance letter published by EPA that includes the fuel econom y ranges for each class of automobile, the fuel price information to be used to calculate costs, and other relevant information. This information will have to continue to be pr ovided by EPA on an annual basis, but the new ratings proposed for the new labels will also require that EPA provide annually the range of fuel economy of all vehicles as well as the range of CO 2 emissions of all vehicles. VI. Additional Related EPA Proposals A. Electric and Plug-In Hybrid El ectric Vehicle Test Proced ures 1. Electric Vehicles There currently is no federal test pr ocedure for measuring fuel economy for electric vehicles. EPA has periodically pe rformed fuel economy testing for electric vehicles utilizing test proce dures and protocols developed by the Society of Automotive Engineers (SAE), specifically J1634. Manuf acturers may continue to use SAEJ1634 test protocols, as cancelled in October 2002 until EPA can comment on a reissued SAE1634 that is in draft, with the exception of not us ing the C coefficient adjustment in paragraph 4.4.2. The C coefficient adjustment was intende d to reflect air conditioning loads. Air conditioning usage is not considered in CAFÉ testing and is accounted for via the 5-cycle or derived 5-cycle equations for labeling. Until recently, there have been very few electric vehicles sold in the U.S. market. The few exceptions, such as the EV1 from General Motors (GM), were only made available to a select few customers for a limited time. As such, there was not a pressing need for an electric vehicle test procedure. However, with the imminent release of several new batte ry electric vehicles from manufacturers such as Ford and Nissan, th e need for a federal test procedure for measuring fuel economy or fuel consumpti on for electric vehicles is apparent. Fuel economy estimates are measured for “city” and “highway” operation. Prior to the 2008 model year, all vehicles were fuel economy tested over just two test cycles: the Federal Test Procedure (FTP or “city” test) and the Highway Fuel Economy Test (HFET or “highway” test). In December, 2006, EPA published revisions to improve the calculation of fuel economy estimates to better reflect real world fuel economy performance 181 . These revisions included three additional chassis dynamometer test cycles to the current FTP and HFET for fuel economy testing purposes. The three additional cycles were the US06, SC03, and th e Cold Temperature FTP. Prior to the 2008 model year, all three test cycles were used for emissions purposes for either the Supplemental Federal Test Procedure (SFTP) emissions standards (US06 and SC03) or the cold temperature (20oF) emission standards. Beginni ng in the 2008 model year, all

181 71 FR 77931, Dec. 27, 2006.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 128 of 339 vehicles tested for fuel economy labeling pu rposes had to use the new “5-cycle” fuel economy methodology which either re quired testing all vehicles over the five test cycles discussed above or apply an equivalent 5-cycle correction referred to as the derived MPG- based approach. For alternative fuel ed vehicles, including electric vehicles, manufacturers have the option for fuel economy testing to test their vehicle over all five test cycles or use a de rived MPG-based approach a. FTP or “City” Test The procedure for testing and measuring fuel economy and vehicle driving range for electric vehicles is simila r to the process used by the average consumer to calculate the fuel economy of their personal vehicle. The distance the vehicle can operate until the battery is discharged to the point where it can no longer provide sufficient propulsive energy energy to maintain the speed tolera nces as expressed in 40 CFR 86.115-78 is measured and divided by the total amount of electrical energy necessary to fully recharge the battery, similar to refueling the ga s tank of a gasoline powered vehicle. The first step of the procedure is to determine the distance the vehicle operates before the battery becomes discharged to the point where the vehicle can no longer provide sufficient propulsive energy to maintain the speed tolerances as expressed in 40 CFR 86.115-78. This begins with the precond itioning of the vehicl e. The electric vehicle is preconditioned per 40 CFR Part 86, Section 132. Following preconditioning, the Rechargeable Energy Storage System (RESS) will be brought to full charge. The RESS will remain plugged into the electrical source for a minimum of 12 hours. For the FTP or city test cycles, the chassis dynamo meter procedures will be conducted pursuant to 40 CFR 86.135 with the exception that the ve hicle will run consecutive test cycles until the vehicle is unable to maintain the FTP speed tolerances as expressed in 40 CFR 86.115-78. To clarify, an FTP historically c onsisted of two Urban Dynamometer Driving Schedules. The Ftp was later shortened to one full UDDS and only the first bag or phase of the second UDDS. The second phase of the second UDDS was considered just a repeat of the second phase of the first UDDS. In the context of electric vehicles, an FTP is two full consecutive UDDS’s. The second UDDS of any FTP cycle will be started 10 minutes after the cold start as per §86.135. Subsequent FTP cycles may require up to 30 minutes between starts due to test facility limitations. Between starts, the RESS is not to be charged. During the 10 mi nute or other longer soaks, th e vehicle should have the hood closed and the cooling fans shut off. If an electric vehicle cannot reach the FT P top speed, then the test will terminate once the vehicle speeds cannot be maintained within 2 mph as described in 40 CFR 86.115-78 up to the maximum speed. For low pow ered electric vehicles that cannot reach the FTP top speed, the vehicle top speed is the maximum speed the vehicle reached during the first FTP. The Administrator may a pprove alternate end of test criteria. For low powered electric vehicles that by desi gn cannot maintain the speed tolerances as expressed in 40 CFR 86.115-78, low powered vehi cles, the vehicle will continue testing if the vehicle is operated at maximum power . This provision is intended to apply uniformly throughout all the consecutive FTP cy cles. A vehicle that can maintain traceFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 129 of 339 speed on the first FTP cannot then be declared a low powered vehicle for subsequent FTP cycles. Upon reaching the end of test criteri a, the distance driven shall be recorded and the vehicle decelerated to a stop. The end of test criteria is when the vehicle can no longer maintain the drive cycle per 40 CF R 86.115-78 or, for a low powered EV, can no longer maintain the speed tolerances pe r 40 CFR 86.115-78 up to the vehicle maximum speed as defined above. Similarly, low powered vehicles that cannot maintain the drive cycle due to insufficient acceleration will us e the trace driven on first UDDS as the tolerance for end of test. The final stage of the electric vehicle te st procedure is the measurement of the electrical energy used to operate the vehicle. The end of test recharging procedure is intended to return the RESS to the full charge equivalent of the pre test conditions. The recharging procedure must start within three hours after completing the EV testing. The vehicle will remain on charge for a minimu m of 12 hours to a maximum of 36 hours. After reaching full charge and the minimum soak time of 12 hours has been reached, the manufacturer may physically disconnect the RE SS from the grid. The alternating current (AC) watt-hours must be recorded throughout th e charge time. It is important that the vehicle soak conditions must not be violated. The measur ed AC watt-hours must include the efficiency of the charger system. The measured AC watt hours are intended to reflect all applicable electricity consumption incl uding charger losses, battery and vehicle conditioning during the rechar ge and soak, and the electr icity consumption during the drive cycles. Finally, the raw electricity consumption is calculated by dividing the recharge AC watt-hours by the distance traveled before the end of the test criteria is reached. b. HFET or “Highway” Test Similar to the FTP test procedure, the first step of the procedure is to determine the distance the vehicle operates before th e battery becomes fully discharged. This begins with the preconditioning of the vehi cle. Vehicle preconditioning is to be conducted as per 40 CFR Part 86, Secti on 132. Following preconditioning, the RESS will be brought to full charge. The RESS w ill remain plugged into the electrical source for a minimum of 12 hours. The vehicle may remain plugged into the electrical source up to 36 hours. Dynamometer procedures will be conducted pursuant to 40 CFR 600.111 with the exceptions that electric vehicles will run c onsecutive cycles of the HFET until the end of test criteria is reached. Subsequent HFET cycle pairs may require up to 30 minutes of soak time between HFET cycle pairs due to faci lity limitations. Between cycle pairs, the vehicle hood is to be closed and the cooling fans shut off. Between starts, the RESS is not to be charged. If an electric vehicle cannot reach the HF ET top speed, then the test will terminate once the vehicle speeds cannot be maintain ed, up to the maximum speed. For low powered electric vehicles that cannot reach the HFET top speed, the vehicle top speed is the maximum speed the vehicle reached duri ng the first HFET. The Administrator mayFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 130 of 339 approve alternate end of test criteria. For low powered elec tric vehicles that by design cannot maintain the speed tolerances as expressed in 40 CFR 86.115-78, the vehicle will continue testing if the vehicl e is operated at maximum power. This provision is intended to apply uniformly throughout all the consecutive HFET cycles. Similarly, low powered vehicles that cannot maintain the drive cycl e due to insufficient acceleration will use the trace driven on first UDDS as th e tolerance for end of test.A vehicle that can maintain trace speed on the first HFET cannot then be declared a low powered vehicle for proceeding HFET cycles. Similar to the FTP test procedure, the fina l stage of the HFET test procedure is the measurement of the electrical energy used to operate the vehicle. The end of test recharging procedure is intended to return the RESS to the full charge equivalent of the pre test conditions. The recharging proce dure must start within three hours after completing the EV testing. The vehicle will remain on charge for a minimum of 12 hours to a maximum of 36 hours. After reaching fu ll charge and the minimum soak time of 12 hours has been reached, the manufacturer may physically disconnect the RESS from the grid. The alternating current (AC) watt- hours must be recorded throughout the charge time. It is important that the vehicle soak conditions must not be violated. The measured AC watt-hours must include the efficiency of the charger system. The measured AC watt hours are intended to reflect all applicable electricity consumption including charger losses, battery and vehicle conditioning during the recharge and soak, and the electricity consumption during the drive cycles. Fina lly, the raw electricity consumption is calculated by dividing the recharge AC watt- hours by the distance traveled before the end of the test criteria is reached. c. Other EV Test Procedures The Administrator may approve or require equivalent or additional EV test procedures including incorpor ating via reference SAEJ1634 p ublished after this notice. 2. Plug-in Hybrid Electric Vehicles a. PHEV Test Procedure Rationale Test procedures for plug-i n hybrid electric vehicles (PHEV) are required to quantify some operation unique to plug-in hybri ds. The intent in developing new PHEV test procedures is to use existing test cycles and test procedures wh ere applicable. PHEV operation can be generally classified into two modes of operation, charge depleting and charge sustaining operation. Charge depleti ng operation can be de scribed as vehicle operation where the rechargeable energy storag e system (RESS), commonly batteries, is being depleted of its “wall” charge. Charge sustaining opera tion can best be described as conventional hybrid operation. New procedures for charge depleting ope ration would consist of existing test cycles repeated until the PH EV RESS is depleted to charge sustaining operation. Whereas in the past a conventional vehicle w ould be expected to consume fuel and emitFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 131 of 339 emissions over repetitive identical test cycles consistently, the same cannot be said of PHEVs. PHEV fuel consumption, fuel mix, and emissions may change as the RESS is depleted. In order to accurately assess the emissions and fuel efficiency of a PHEV, the PHEV requires testing over the entire charge depleting range. Testing over the entire charge depleting range requires new test prov isions to address vehicle setup and prep, measuring and charging the RESS, operation ove r repetitive test cycles, and calculating any new values that are now meas ured over repetitive test cycle. As described above, charge sustaining operation can best be described as conventional hybrid operation. EPA would c ontinue to use existing hybrid electric vehicle test procedures. Th e primary differences between HEV and other conventional vehicle testing are the need to monitor RE SS state of charge and the extra drive time required to insure vehicle warm operation duri ng the Federal Test Procedure. The RESS is measured and subject to the state of charge tolerances, below, to insure all energy is accurately accounted. The fully warm operati on is satisfied by running a full 4 phase Ftp instead of the abbreviated 3 phase Ftp as traditionally used fo r conventional vehicle testing. For the purposes of fuel economy label te sting, PHEVs would be subject to the same test cycles as other light duty vehicl es with a few exceptions. While operating in charge depleting mode, a PHEV is using electr icity originally from an off board source. This is to say that a PHEV is operating at least partially on an alternative fuel while operating in charge depleting mode. For the purposes of fuel economy, PHEVs could continue to use the derived 5-cycle adjustme nt while in charge depleting mode. The derived 5-cycle adjustment would be applied to the total city and total highway fuel economies separately. For the purposes of appl ying the 5-cycle correc tion, the total fuel economies in charge depleting mode include both of the fuels consumed, typically gas and electricity, as expressed in a miles per gallon of gasoline equivalent unit. The 5- cycle correction is to be applied to the comb ined energy of each m ode of operation even if the energy consumption is ultimately fu el specific. Applying a correction to the gasoline and electricity consumption separately could lead to a smaller adjustment than other vehicles since the 5-cycl e correction is not linear. Wh ile in charge sustain mode, PHEVs would be subject to th e same test procedures as conventional hybrid electric vehicles. PHEVs must meet all applicable emissions standards regardless of RESS state of charge. EPA will consider a RESS as an adjustable parameter for the sake of emissions testing. It is the manufacturer’s responsibility to insure vehi cles are emissions compliant. EPA typically allows good engineering judgmen t in applying worse case emission testing criteria. For the purposes of certification compliance, EPA will consider charge sustain operation as worse case. EPA may confirmatory test or request the manufacturer to provide test data for any test cycle at any state of charge . Evaluation of fuel economy testing emissions may be used to change worse case emissions assumptions. b. PHEV Test Procedure and CalculationsFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 132 of 339 The EPA proposes to incorporate by reference SAEJ1711, in part, for PHEV test procedures. Charge Depleting Operation – FTP or “City” Test and HFET or “Highway” Test The EPA proposes to incorporate by re ference SAEJ1711 chapters 3 and 4 for definitions and test procedures, respectively, where appropriate, with the following exceptions and clarifications. UF weighti ng is not intended for use with criteria pollutants. Test cycles will continue until the end of the phase in which charge sustain operation is confirmed. Charge sustain opera tion is confirmed when one or more phases or cycles satisfy the Net Energy Change requirements below. EPA seeks comment on manufacturers optionally term inating charge deplete tes ting before charge sustain operation is confirmed with state of charge provided that the RESS has a higher SOC at charge deplete testing termination than in char ge sustain operation. In the case of Plug In Hybrid Electric Vehicles with an all electric range, engine start time will be recorded but the test does not necessarily terminate with engine start. PHEVs with all electric operation follow the same test termination crit eria as blended mode PHEVs. Testing can only be terminated at the end of a test cycle. The Admini strator may approve alternate end of test criteria. For the purposes of charge depleting CO 2 and fuel economy testing, manufacturers may elect to report one meas urement per phase (one bag per UDDS). Exhaust emissions need not be reported or measured in phases the engine does not operate. End of test recharging pro cedure is intended to return the RESS to a full charge equivalent to pre test conditions. The recharge AC watt hours must be recorded throughout the charge time. Ve hicle soak conditions must not be violated. The AC watt hours must include the charger efficiency. The measured AC watt hours are intended to reflect all applicable electricity consumption including charger losses, battery and vehicle conditioning during the rechar ge and soak, and the electr icity consumption during the drive cycles. Net Energy Change Tolerance, NEC, is to be applied to the RESS to confirm charge sustaining operation. The EPA is proposing to adopt the 1% of fuel energy NEC state of charge criteria as expressed in SAEJ1711. The Administrator ma y approve alternate NEC tolerances and state of charge correction fa ctors if the 1% criteria is insufficient or inappropriate. Preconditioning special procedures are optiona l for traditional “warm” test cycles that are now required to test starting at full RESS charge due to charge depleting range testing. If the vehicle is equipped with a ch arge sustain switch, the preconditioning cycle may be conducted per 600.111 provided that the RESS is not charged. Exhaust emissions are not taken in preconditioning drives. Alternate vehicle warm up strategies may beFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 133 of 339 approved by the Administrator. This will a llow a method for starting “warm” test cycles with a fully charged battery. Hybrid Charge Sustaining Operati on – FTP or “City” Test and HFET or “Highway” Test The EPA proposes to incorporate by re ference SAEJ1711 chapters 3 and 4 for definitions and test procedures. The EPA pr oposes to adopt the 1% of fuel energy NEC state of charge criteria as expressed in SAEJ1711. Th e Administrator may approve alternate NEC tolerances and state of charge correction factors if the 1% criteria is insufficient or inappropriate. Preconditioning special procedures are opti onal for traditional “w arm” test cycles that are now required to test starting at full RESS charge due to charge depleting range testing. If the vehicle is equipped with a ch arge sustain switch, the preconditioning cycle may be conducted per 600.111 provided that the RESS is not charged. Exhaust emissions are not taken in preconditioning drives. Alternate vehicle warm up strategies may be approved by the Administrator. Charge Depleting Range Determination Actual Charge Depleting Range (R CDA ) will be a calculated value that uses the charge sustaining state of charge of the RESS to define the R CDA endpoint. Due to the nature of PHEVs, R CDA will require calculation and is not necessarily when the engine first starts. Defining R CDA using only engine on could leave PHEVs with three modes of operation. These three modes would be ch arge depletion, char ge regeneration, and charge sustaining. If the regeneration of th e RESS from the engine is not accounted for in the charge depleting mode, the RESS could be deep cycled beyond the CS SOC to gain range while the increase in CO 2 emissions due to the RESS regeneration would not be captured in the charge sustaining testing. Calculation of R CDA will require monitoring the RESS SOC throughout charge depleting testing. The R CDA for each cycle would be the driven cycle distance from start of CD testing until the charge sustaining SOC is “crossed”. The EPA is proposing to incorporate by reference the SAEJ1711 calcula tion for Actual Charge Depleting Range. c. Other Test Cycles PHEV and Electric vehicle testing over th e SC03, US06, or Cold CO test cycles would follow the same general procedure as the FTP and HFED. EPA would consider the use of alternate or equiva lent PHEV test procedures a nd may incorporate by reference SAEJ1711. d. Test TolerancesFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 134 of 339 State of Charge tolerance correction factor s may be approved by the Administrator. RESS state of charge tolerances beyond the 1% of fuel energy may be approved by the Administrator. e. Mileage and Service Accumulation The EPA is seeking comment on mo difying the minimum and maximum allowable test vehicle accumulated mileage fo r both EVs and PHEVs. Due to the nature of PHEV and EV operation, testing may require many more vehicle miles than conventional vehicles. Furthermore, EVs and PHEVs either do not have engines or may use the engine for only a fraction of the miles driven. f. Test Fuels Electric Vehicles and PHEVs are to be recharged using the supplied manufacturer method provided that the methods are available to consumers. This method could include the electricity service requirements such as service amperage, voltage, and phase. Manufacturers may employ the use of voltage regulators in order to reduce test to test variability with prior Administrator approval. B. Utility Factors 1. Utility Factor Background Utility Factors are a method of combining CO 2 emissions, fuel consumption, or other metrics from multiple modes of operation into one value. The extent to which utility factors are used on a fuel economy label is completely dependent upon label format. That is to say, some PHEV label form ats may not require util ity factors at all or possibly only for CO 2. This discussion on utility factor is required to understand the different PHEV label formats within this proposal. As discussed previously, PHEVs can use two types of energy sources: (1) an onboard battery charged by plugging the vehicle into the electrical grid possibly via a conventional wall outlet to power an electric motor, as we ll as (2) a gas or diesel-powered engine to propel the vehicle or power a gene rator used to provide electricity to the electric motor. Depending on how these vehi cles are operated, they can use electricity exclusively, never use electricity and operate like a conventional hybrid, or operate in some combination of these two modes. Th is can make it difficult to estimate fuel economy, fuel consumption, annual cost, or CO 2 emissions from these vehicles. The EPA has worked closely with stake holders including vehicle manufacturers, the Society of Automotive Engineers (SAE), th e State of California, the Department of Energy (DOE), and others to develop an a pproach for estimating fuel economy, fuel consumption, cost, CO 2 emission, or any other metric for vehicles that can operate using more than one energy source. EPA believe s the appropriate met hod for combining the operation of vehicles that can operate with more than one fuel would be a weightedFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 135 of 339 average of the appropriate metric for the two modes of operation. A methodology developed by SAE and DOE to predict the frac tions of total distance driven in each mode of operation (electricity and ga s) uses a term known as a util ity factor (UF). UF’s were developed using data from the 2001 Departme nt of Transportation “National Household Travel Survey”. A detailed method of UF development can be found in the Society of Automotive Engineers (SAE) J2841 “Utility Fa ctor Definitions for Plug-In Hybrid Electric Vehicles Using Travel Survey Data”. At the tim e of this proposal, SAEJ2841 was in the process of balloting prior to publishing. SAE reference documents can be obtained at www.SAE.org . By using a utility factor, it is possible to determine a weighted average of the elec tric and gasoline modes. Fo r example, a UF of 0.8 would indicate that an all-electric capable PHEV ope rates in an all electric mode 80% of the time and uses the engine the other 20% of th e time. In this example, the weighted average fuel economy value would be influen ced more by the electrical operation than the engine operation. For the purposes of PHEVs, UF deve lopment makes several assumptions. Assumptions include: the first mode of operatio n is always electric assist or all electric drive, vehicles will be charged once per da y, and that future PHEV drivers will follow drive patterns exhibited by the drivers in the surveys used in SAEJ2841. EPA acknowledges that current understanding of th e above assumptions and that the data upon which utility factors were developed may change. Therefore, EPA may change the calculation of future utility factors in light of new data in a future rulemaking. 2. General Application of Utility Factors While acknowledging the assumptions a bove, a UF could be assigned to each successive test or phase of testing until the ba ttery charge was depleted to the point where the PHEV sole source of power was from th e gasoline or diesel engine. One minus the sum of all the utility factors would then repres ent the fraction of driving performed in this “gasoline or diesel mode.” Carbon dioxide emissions could then be expressed as: Equation VI.B.2-1

Where: Y m is the Utility Factor averaged mass of carbon dioxide for a specific drive cycle. Y i are the CO 2 mass emissions or CO 2 equivalent mass emissions for each phase or test cy cle. For electricity, a carbon dioxide equivalent may be used as determined by the Administrator. CS i i i ii m 

## YUF YUF Y ×−+×= 

# ∑ ∑ )1()( 1 1Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 136 of 339 Y cs is the charge sustain carbon dioxide mass emissions and for hybrids in the case of the FT P can be expressed as Y cs = 0.43* Y c + 0.57* Y H. , where Y c is the charge sustain cold start test and Y H is the charge sustain hot start mass emissions of carbon dioxide. UF i is the driving cycle and sequentially specific utility factor. Likewise, the electrical consumption woul d be expressed by adding the electricity consumption from each mode. Since there is no electrical consumption in hybrid mode, or charge sustain mode, the equation for electricity consumption would be as follows: Equation VI.B.2-2

Where E m is the utility fact or averaged electricity consumption, E i is the electricity consumption proportioned to each successive drive cycle, and UF i is the driving cycle and sequentially specific utility factor. 3. Calculating combined values us ing Cycle Specif ic Utility Factors Utility factors could be cycle specific not only due to different battery ranges on different test cycles but also due to the fact that “highway ” type driving may imply longer trips than urban driving. This would lead to different utility factors for urban and highway driving. The following section explains the EPA proposal of assigning a utility factor to each successive phase or test cycl e performed in charge depleting or “PHEV” mode. Utility factors can be assigned to each mode of operation according to the distance driven in each mode for a give n powertrain combination. Rather than calculating a unique UF for each cycle based on measured distance driven, UF’s will be assigned to each successive phase of consecutive Urban Dynamometer Driving Schedules, and each successive Highway Fuel Economy Driving schedule of consecutive HFEDs. Composite city and composite highway CO 2 emissions will first be calculated using test results and UFs from the respective cycles. Final combined values will then be an averaged 55% city and 45% highway value. The propos ed cycle specific utility factors for UDDS or “city” driving are pr ovided in Table VI.B.2-1 and the proposed cycle specific utility factors for HFEDS or “highway” driving are provided in Table VI.B.2-2. The method used to develop cycle specific utility fact ors can be found in SAEJ2841. EPA seeks comment on using util ity factors other than the fleet 55/45 city/highway specific utility factors for la beling and compliance. Finally, example CO 2 calculations are provided below. 

# ∑ ×= i ii m 

## EUF E 1 

## )(Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 137 of 339 Table VI.B.2-1 FTP Phase Specific Utility Factors Urban Driving, “City”

Phase Distance, mi Cumulative UF Seq. UF 1 3.59 0.125 0.125 2 7.45 0.243 0.118 3 11.04 0.340 0.096 4 14.9 0.431 0.091 5 18.49 0.505 0.074 6 22.35 0.575 0.070 7 25.94 0.632 0.057 8 29.8 0.685 0.054 9 33.39 0.729 0.044 10 37.25 0.770 0.041 11 40.84 0.803 0.033 12 44.7 0.834 0.031 13 48.29 0.859 0.025 14 52.15 0.882 0.023 15 55.74 0.900 0.018 16 59.6 0.917 0.017

Table VI.B.2-2 HFED Cycle Specific Utility Factors Highway Driving

HFEDS Distance, mi Cumulative UF Seq. UF 1 10.3 0.125 0.125 2 20.6 0.252 0.127 3 30.9 0.378 0.126 4 41.2 0.500 0.121 5 51.5 0.610 0.111 6 61.8 0.707 0.097 7 72.1 0.787 0.080 Example CO 2 Calculations A PHEV was tested with the following re sults. The example PHEV operated over four consecutive UDDS to quantify charge depleting or “PHEV” mode and ran the required bag hybrid UDDS test to represent charge sustaining or “hybrid” mode.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 138 of 339

Table VI.B.2-3 Charge Depleting Example CO 2 Emissions UDDS Bag Cycle Miles CO 2 g/mi CO 2 g Dc Integrated Amp Hrs Proportioned W hrs Measured Distance, mi UF Whr/mi

1 1 3.59 50.0 180.5 4 705.88 3.61 0.125 195.5 1 2 7.45 35.0 134.8 3.8 670.59 3.85 0.118 174.2 2 3 11.04 30.0 107.4 3.7 652.94 3.58 0.096 182.4 2 4 14.9 37.0 143.2 3.5 617.65 3.87 0.091 159.6 3 5 18.49 55.7 198.3 2 352.94 3.56 0.074 99.1 3 6 22.35 232.5 902.2 0 0 3.88 0.07 0.0 4 7 25.94 249.2 877.3 0 0 3.52 0.057 0.0 4 8 29.8 230.0 897.0 0 0 3.90 0.054 0.0

Table VI.B.2-4 Charge Sustaining Example CO 2 Emissions UDDS Bag Cycle Miles CO 2 g/mi CO 2 g Measured Distance, mi 1 1 3.59 251.4 910 3.62 1 2 7.45 233.8 900 3.85 2 3 11.04 251.4 890 3.54 2 4 14.9 228.1 885 3.88

Applying the above data for the example PHEV to the General UF formula in Equation VI.B.2-1 using Table VI.B.2-1 will yield the City CO 2 value. Ym=50 CO 2 g/mi x 0.125+ 35 CO 2 g/mi x 0.118 + 30g CO 2 g/mi + 0.096 + 37g CO 2 g/mi x 0.091+ 55.7 CO 2 g/mi x 0.074 + 232.5 CO 2 g/mi + 0.070 + 249.2 CO 2 g/mi x 0.057 + 230 CO 2 g/mi x 0.054 + (1-(0.125+0.118+0.096+0.091+0.074+0.070+0.057+0.054) x (Ycs). Where Ycs = 0.43 x (910+900)/(3.62+3.85) + 0. 57 x ( 890+885)/(3.54+3.88) = 241g CO 2 g/mi. The total CO 2 g/mi, Ym, excluding any electricity CO 2 equivalence would then be 139 g/mi. To determine electricity consumption one would apply utility f actors in a similar fashion using equation VI.B.2-2 and Ta ble VI.B.2-1. Em= 195.5 W hr/mi x 0.125+ 174.2 W hr/mi x 0.118 + 182.4 W hr/mi + 0.096 + 159.6 W hr/mi x 0.091+ 99.1 W hr/mi x 0.074 = 84.4 W hr/mi The combined CO 2 from engine operation and the CO 2 from the electrical consumption could be calculated by summing the two values, given a CO 2 equivalency for electricity. For example, if the Watt hour CO 2 equivalent was 0.26g CO 2 per Watt hour, the total CO 2 emissions could then be expressed as the sum of the CO 2 and CO 2 - equivalent emissions from bot h modes of operation. From th e example above, the overall CO 2 emissions would be 139 gCO 2 per mile + (84.4 Whr/mi) 22gCO 2 equiv per mile = 161g CO 2 per mile.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 139 of 339 Utility factors can also be used to calculate a miles per gallon equivalent measurement similar to the CO 2 example above. Additional assumptions are required, however, when applying utility factors to a Corporate Average Fuel Economy and possibly a fuel economy labeling miles per ga llon of gasoline equivalent measure. Previously, when calculating PHEV CO 2 emissions, the CO 2 emissions were part of a manufacturer fleet average. The same is true of Corporate Average Fuel Economy. CAFE is a fleet average. Except where expl icitly noted for dual fueled vehicles, both CAFÉ and CO 2 fleet calculations would use the cycl e specific fleet utility factors. For the purposes of a possible label fuel economy, a fleet average is not the aim, but rather what the average driver would likely experien ce or expect. For this reason, the EPA is proposing the use of the cycl e specific Multiday Individua l Utility Factors. The individual utility fact ors do not weight vehicle miles trav eled towards the longer trips like fleet utility factors. For a detailed expl anation on utility factor development see SAEJ2841. Similar to determining a total CO 2 emissions value for PHEVs, calculating a miles per gallon total for PHEVs will require an electricity to gasoline conversion. This miles per gallon equivalent of gasoline w ould be calculated differently for CAFÉ and label. For a FE label number, EPA would us e a miles per gallon of gasoline equivalent energy factor for electricity of 33,705 watt hours per gallon. 182 This same gasoline equivalency would be used for CAFÉ calcu lation, if the PHEV did not meet the minimum distance requirements of a dual fueled vehicle. 183 In the case of PHEVs with diesel engines, EPA proposes to similarly require calculation of a miles per gallon equivalent for battery operat ion, but specifying instead to rely on a conversion using the energy content of diesel fuel. We propos e to specify an energy content of 36,700 Watt hours per gallon of diesel fuel. This is based on the approximately 9 percent higher energy density for diesel fuel relative to gaso line. We request comme nt on this approach to calculating fuel economy values for diesel-fueled hybrid electric vehicles. If the PHEV met the dual fuel range minimums for electricity a Petroleum Equivalency Factor would be used instead of the gasoline equivalent energy factor. For a PHEV without fuel fired accessories, the PEF would be 82,049 watt hours per gallon of gasoline. For details on PEF and gasoline equivalent energy c ontent see 10 CFR 474.3. Using the procedure for calculating a dual fuel ed vehicle FE for CAFÉ the fuel economy of both modes of operation would be harmonical ly averaged 50/50 and a utility factor would not be necessary. 184

4. Low Powered Vehicles. Vehicles using the low powered vehi cle provision in 40 CFR 86.115-78(b)(4) shall use the actual distance driven in calcula ting cycle specific utility factors. The coefficients used in determining UF shall be as follows in table VI.B.2-5

182 65 FR 36990, June 12, 2000. 183 49 U.S.C. 32901(c) and 49 CFR 538.5 Minimum Driving Range. 184 49 U.S.C. 32905(b).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 140 of 339 Table VI.B.2-5 City/Highway Specific Utility Factor Coefficients City Hwy norm_dist 399 399 C1 14.86 4.80 C2 2.97 13.00 C3 -84.05 -65.00 C4 153.70 120.00 C5 -43.59 -100.00 C6 -96.94 31.00 C7 14.47 C8 91.70 C9 -46.36

Equation VI.B.2-5

1 1 1 1 j k n i i ji j i d UF e C UF ND −

= = ⎡ ⎤ ⎛ ⎞ ⎛ ⎞

⎛ ⎞ ⎢ ⎥ =− ⎜ × ⎟− ⎜ ⎟

⎜ ⎟ ⎜ ⎟ ⎝ ⎠ ⎢ ⎥ ⎝ ⎠ ⎝ ⎠ ⎣ ⎦ 

## ∑ ∑

Where ND is the normalized distance (399), j is the coefficient index, k is the number of coefficients for city (9) and for highway (6), C are the coefficients listed in Table VI.B.2- 5, d is distance driven in each cycle or phase , i is a counter repres enting each cycle or phase, and n is the number of cycles or phase s needed to reach the end-of-test criterion. The calculated cycle specific utility fact ors for low powered vehicles would be applied in the same manner as paragraph B .3, except that the utility factors would be calculated based on measured distance and not assigned based on phase or cycle distance. C. Comparable Class Categories EPCA requires that the label include th e range of fuel economy of com parable vehicles of all manufacturers. 185 EPA’s comparable class structure provides a basis for comparing a vehicle’s fuel economy to th at of other vehicles in its class. 186 The definitions of vehicle classes were last re vised by EPA’s 2006 labeling final rule. That action finalized two specific changes to the ve hicle class structure. Separate new classes were added for sport utility vehicles (SUVs) and minivans (these were previously included in the Special Purpose Vehicle cate gory), and the weight limit for Small Pickup Trucks was increased from 4,500 pounds gro ss vehicle weight rating (GVWR) to 6,000 pounds GVWR. These were non-controversial ch anges that were generally seen as a move to keep the class structure as current as possible given the changing vehicle market.

185 49 U.S.C. 32908(b)(1)(C). 186 40 CFR 600.315-08.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 141 of 339 The resulting structure is one th at contains nine car categorie s, five truck categories, and a “special purpose vehicle” category. It should also be noted that the EPA-defined vehicle classes are used only to provide c onsumer information about fuel economy and serve no other regulatory purpose. EPA is proposing one modification to the cl ass categories. Consistent with the distinction currently made between small a nd large pickup trucks, EPA is proposing to divide the SUV class into small and large SUVs . We do not believe that it is appropriate, for example, to include a Toyota RAV4 in the same class as a Toyota Sequoia, or a Ford Escape in the same class as a Ford Expe dition. The single SUV category currently described in the regulations would be repl aced by the two followi ng proposed categories:

• Small sport utility vehicles: Sport ut ility vehicles with a gross vehicle weight rating less than 6,000 pounds.

• Standard sport utility vehicles: Sport utility vehicles with a gross vehicle weight rating of 6,000 pounds up to 10,000 pounds. Although the standard pickup truck class only goes up to 8,500 pounds GVWR, SUVs between 8,500 and 10,000 pounds GVWR are defined as medium-duty passenger vehicles, and they will be subject to fu el economy labeling starting with the 2011 model year. EPA requests comment on whether this is an appropriate wa y to distinguish the SUV classes. Although EPA received many comments on the 2006 rule regarding the class structure, some of its inherent problems, and how people may or may not shop within classes, there were no specific suggestions on how to revise the stru cture to resolve the issues that were raised. We believe that w ith the refinement to the SUV category we are proposing, the comparable class structure would generally represent the physical distinctions between vehicle types offered in the fleet today. However, there may be other distinctions between vehicles not captured in these ca tegories, such as the luxury vehicle segment. The DOE/EPA web site ( www.fueleconomy.gov ) incorporates vehicle cost into the sedan category, for example, dividing sedans into “family,” “upscale,” and “luxury.” EPA requests comment on incorporati ng such an approach into the comparable class categories, and specifi cally, how it might be done given the changing nature of vehicles and vehicle prices. We welcome in terested parties to c ontinue working with EPA in the future on how to ensure that the comparable classes are kept current with the dynamic vehicle fleet. If it becomes necessary in the future to further modify the comparable class structure, EPA would do so through a rulemaking. EPA requests general comments on the proposed modificati ons to comparable classes, and also welcomes comments on other possible ways to classify vehicles for comparison purposes. Comments should address how the classifications will be useful for the consumer who is comparison shopping. D. Using Smartphone QR Codes ® to Link to Fuel Economy Information For all the label designs be ing considered, EPA is proposing that manufacturers place a QR Code on the label that will link the web browser of a properly configured smartphone to the mobile version of the EP A/DOE fuel economy information web site, orFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 142 of 339 alternatively, to the vehicle-specific in formation located on the EPA/DOE website. 187 (Note that although the proposed Label 1 desi gn incorporates a different website URL, the intent would remain the same: to use the QR Code to dire ctly link the users smartphone to vehicle-specific information while providing additi onal tools for making vehicle comparisons, learning more about the vehicle, etc.) Many focus group participants expressed excitement and intere st in the prospects of being able to access information in this way using their mobile devices, and EPA believes it is a potentially useful and valuable tool for consumers. QR Codes, like other two-dimensional ba r codes, are simply used to store information. QR Codes were originally deve loped for use in tracking parts in vehicle manufacturing, and are now being used for ot her purposes, such as storing a web site URL into an encoded graphic that can be s canned. These codes – the use of which is growing in popularity in the U. S. – are two-dimensional black and white codes (like a bar code) that eliminate the need to type a web link into a mobile phone (an action that can be cumbersome and that many mobile users might prefer avoiding). Reading a QR Code requires that scanning software be inst alled on the mobile phone. Many smartphone manufacturers have begun to pre-install QR Code readers, but for those that do not, the readers are very easy to download, and many ar e available for free for nearly every type of mobile device. Once equipped with the correct scanning application, consumers can point and scan to instantly connect to inform ation they actually want, versus information pushed to them. For example, scanning the proposed code would link the phone’s web browser to the mobile version of the DOE/EPA website. At that point the user c ould view additional information about the efficiency and environmen tal impacts of the vehicle, with available options such as creating customized estimates based on the user’s personal driving habits and distances. The user could also look up other vehicles and compare those to the vehicle they are viewing. EPA is proposing that the manufacturer place one of two QR Codes on the fuel economy label. These QR Codes would be dete rmined based on an international standard that would be incorporated by reference in the regulations. 188 The default option would be to insert the QR Code that would take th e user’s web browser to the mobile version of the DOE/EPA fuel economy information web site . The QR Code for this site, including the text that EPA proposes accompanies it, would look like this:

187 The term QR Code is a registered trademark of Denso Wave Incorporated, which owns the patent rights to the QR Code. However, the patent right is not exercised, allowing the specification of the QR Code to be disclosed and open for widespread use. For more information, see http://www.densowave.com/en/adcd/index.html

. 188 International Organization for Standardization, ISO/IEC 18004:2006, Information technology – automatic identification and data capture techniques – QR Code 2005 bar code symbology specification, August 31, 2006.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 143 of 339 Smartphone Interactive Scan QR Code for more information about this vehicle, to get customized estimates, or to compare it with other vehicles.
Alternatively and preferably, th e manufacturer would use the QR Code that represents the URL where information for the specific labeled vehicle is available. However, this would depend upon resolving some specific data issues. For example, the manufacturer would have to know the vehicle-specific URL at the time the label is printed. This could require that EPA issue more fr equent updates to the web site throughout the year, or that EPA assign a vehicle identification parameter early in the process. It may be the case that even if the vehicle is not yet included on th e DOE/EPA web site that a URL, and thus a QR Code, could be easily assigned or determin ed. EPA is confident that we can work with DOE to resolve any potential implementa tion issues prior to th e 2012 model year. E. Fuel Economy Information in the context of th e “Monroney” Sticker As noted in Section VIII, the Automob ile Information Disclosure Act (AIDA) requires the affixing of a reta il price sticker to the windshi eld or side window of new automobiles indicating the Manufacturer's Sugge sted Retail Price of the vehicle and other required vehicle information. AIDA is mo re commonly known as the Monroney Act (Senator Mike Monroney was the chief sponsor of AIDA) or Price Sticker Act. See 15 U.S.C. 1231-1233. This sticker is commonly cal led the “Monroney” label. EPCA states that EPA “may allow” a manufacturer to comply with the EPCA labeling requirements by placing the fuel economy information on th e label required by AI DA, a practice that has been used by most manufacturers. S ee 49 U.S.C. 32908(b)(2). In fact, EPA regulations express a specific preference that manufacturers do this, “provided that the prominence and legibility of the fuel economy label is maintained.” See 40 CFR 600.306-08(c). In the third phase of focus groups we had participants consider the placement of the fuel economy on the Monroney label, a nd whether participants had a specific preference for where to locate the fuel economy information. Although participants expressed a variety of opinions , a slight preference emerged for displaying the fuel economy information in the upper right portion of the Monroney label. The agencies recognize that EPCA does not require that the fuel economy information be on the Monroney label, a nd that there are instances when auto manufacturers may want to display the fuel economy information separately (e.g., if window space is limited on a small vehicle and/or the Monroney label size needs to be reduced). EPA does not intend to preclude th e option of placing the new label in any appropriate and prominent location on the ve hicle. However, the agencies request comment on whether we should require that th e fuel economy information be placed in a specific location on the Monroney label (such as the upper right corner, or on the rightFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 144 of 339 side) as a condition of allowing the info rmation to be included on that label. 189 Although consumer preference for a specific locati on on the Monroney was vague, the agencies believe that consumers would be able to lo cate the new label information on the vehicle more easily if it appeared in a consiste nt location within th e Monroney sticker. The agencies also seek comment con cerning the potential for the new label information to create confusion about other information found on the Monroney Label, in particular, the star safety ra tings. Specifically, the agencies seek comment on whether consumers might interpret the large letter grad e on Label 1 as applying to other aspects of the vehicle’s performance (such as safety ) besides fuel economy and environmental impacts. To mitigate this concern, the agen cies have created a prominent black border and title indicating the purpos e of the information. Nevertheless the agencies seek comment on whether additional measures should be required under 32908(b) and (g) to address this potential confusion. The agencies also seek comment on whethe r the co-proposed labels, in particular Label 1 with its use of colo r and large font for the overall letter grade, might inadvertently distract consumers from the bl ack-and-white star safety ratings. As one way of addressing this po tential issue, NHTSA propos es to require under 49 CFR 575.301 that the star safety ratings be located as close as physically possible to the new fuel economy and environmental label to help ensure that the star safety ratings do not get “lost” on the Monroney Label. Sim ilarly, the agencies seek comment on whether their regulations for the new fuel economy a nd environmental label should require that it be located as close as physically pos sible to the star safety ratings. Another way of addressing th is potential issue is by re-visiting the minimum size requirements for the safety rating label and the font of information on it. In a final rule 190 implementing the requirement in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Us ers (SAFETEA-LU) for placing safety rating information on the Monroney vehicle price la bel, the agency interpreted that Act’s specification of a minimum size for the label as indicating the agency did not have any discretion regarding minimum size, instead of interpreting the specification as merely establishing a floor on the disc retion of the agency to specify a minimum size. In comments made in response to a subsequent proposal 191 to place an overall safety rating on the safety rating label, the Advocates fo r Highway and Auto Safety questioned that interpretation. In a recent meeting with Bosch, representa tives of that company also questioned that interpretation. In light of the issues in this rulemaking and those questions, the agency is re-e xamining that interpretation.

189 Based on 49 U.S.C. 32908(b)(2 ), EPA currently conditions placement of the fuel economy label in the Monroney label on a general requirement that the prominence and legibility of the label be maintained. EPA is inviting comment on expanding the conditio ns for placement in the Monroney label through addition of more specific requirements related to the location of the fuel economy label in the Monroney label. 190 71 FR 53572, 53576, September 12, 2006. 191 75 FR 10740, March 9, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 145 of 339 F. Miscellaneous Amendments and Corrections EPA is also proposing a num b er of non-controversial amendments and corrections to the existing regulations. First, we are making a number of correcti ons to the recently finalized regulations for controlling automobile greenhouse gas emissions. 192 These changes include correcting typographical errors, correcting so me regulatory references, and adding some simple clarifications. Second, we are correcting an oversight fr om the 2006 labeling rule regarding the applicability of testing requi rements to independent commercial importers (ICIs). Currently several vehicle categ ories (dedicated a lternative fuel, dual fuel while operating on alternative fuel, and MDPVs) are exempted from having to perform full 5-cycle fuel economy testing. These categories are allowe d to use the “deriv ed 5-cycle” method, whereas other vehicles must use data from all five test cycles at certification to perform an evaluation that determines whether the test group can use the derived 5-cycle method or whether they must complete full 5-cycle testing. The reason for exempting these vehicles is that the evaluation required at certifica tion requires the use of all 5 cycles as run for emissions certification, but thes e categories are not subject to the SFTP requirements, and thus such vehicles do not pe rform two of the five test procedures (the US06 high speed/acceleration test and the SC03 air conditioni ng test). Thus when EPA finalized the 2006 label rule we recognized th at these categories woul d not have the data required to perform the certification evaluation, and we decided to exempt them from five cycle testing. However, this same exemption should have been applie d to ICIs. Like the vehicle categories noted above, vehicles imported by ICIs are not required to perform the SFTP emission tests, and thus also won’t have the necessary data to perform the 5-cycle certification evaluation. Theref ore, we are proposing to ex tend the allowance to use the derived 5-cycle method to ICIs. Third, we are taking steps to further clean up the regulatory language. This involves removing several sect ions that apply only for model years before 2008 and moving or combining several of the remaining sections to provide a clearer organization. We are also being more caref ul with regulatory references pointing to other sections within 40 CFR part 600 and to sections in 40 CFR part 86. This largely addresses the concern that regulatory sections numbered for certain model years can cause references to be incorrect or misleading over time. We are proposing to rely on the rounding convention as specified for engine testi ng in 40 CFR part 1065. Similarly, we are proposing to rely on the hearing procedur es specified in 40 CFR part 1068. These changes allow us to centralize provisions that have general applicability to support our effort to have a consistent approach acro ss programs. The propos ed regulations also include a streamlined set of references to out side standards (such as SAE standards). For the final rule, we also intend to include th e most recent updates for the ASTM standards we reference in part 600. We are not inte nding to make any substantive changes to the regulatory provisions affected by these administrative cha nges and are not reopening the

192 75 FR 25324, May 7, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 146 of 339 rule for any of those provisions. Nevert heless, we request comment on these changes and on any further steps that would be appr opriate for maintaining clear and concise regulatory provisions. VII. Projected Impacts of the Proposed Requirements Vehicle m anufacturers have been required to provide fuel economy labels on vehicles since 1977. The costs and benefits of label revisions would be those associated with changes to the current la bel, not the costs and benefits associated with production of the label itself. The change in cost from this proposed rule comes in the physical revisions to the label itself and the possibl e efficiencies achieved by meeting EPCA and EISA labeling requirements in one label, as well as proposed modi fied vehicle testing procedures, and any revisions of currently provided information that consumers find useful in informing their purchase decisions . The benefits of the rule come from providing labels for mass-market advanced technology vehicles for the first time, and from any improvements in the effectiveness of labels for conventional vehicles in providing accurate and useful consumer information on fuel consumption and environmental performance. A. Costs Associated with this Rule Testing requirem ents for vehicles ar e not new. Advanced technology and alternative fuel vehicles have been required to undergo testing requi rements in the past. For advanced technology vehicles, though, the te st procedures have not previously been standardized; they have been handled on a case-by-case basis. Because EPA expects more advanced technology vehicles to come to market, we propose to codify testing procedures in a public process and are reque sting comment on them. See section VI of this preamble. The testing costs described here therefore are not really new costs for manufacturers, since they would have to test th e vehicles even in the absence of this rule. The cost estimates are provided here because they have previously not been presented, and EPA seeks comment on the analysis of costs presented here. The analysis of the projected costs of th is rule follows conceptually the approach in the 2006 (“five-cycle”) fuel economy labeling rule. Increased on-going operations and maintenance (O&M) costs and labor hours re sult from the costs of printing the labels and increases in testing costs for electric vehicles (EVs) and plug-in hybrids (PHEVs). We also allow for the costs of increased faci lity capacity to accommodate the increased testing time involved for these two categories of vehicles. Startup costs are treated as capital costs, and are amortized over ten years at 7% interest. Start up costs for this rule include some one-time graphic design work fo r each manufacturer subject to the rule and updating information systems and testing equi pment for those manufacturers subject to new testing. As an aid to the an alysis and to help articulate the range of uncertainty, we include both low and high cost estimates for each of these cost and labor hour elements. The cost estimates are $649,000 per year for the low estimate, and $2.8 million per year for the high estimate. For details of this an alysis, see the “Draft Supporting Statement forFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 147 of 339 Information Collection Request, Fuel Econom y Labeling of Motor Vehicles (Proposed Rule)”, in the docket. 193 1. Operations and Maintenance Costs and Labor Hours a. New Testing Requirements for El ectric Vehicles and Plug-in Hybrid Electric Vehicles i. Testing requirements for Electric Vehicles As explained in Section VI of this Pr eamble, EPA currently has no federal test procedure for measuring fuel economy for el ectric vehicles (EVs). To date, EPA has performed some fuel economy testing conn ected with certification applications for electric vehicles using the pr ocedures developed by the Society of Automotive Engineers (SAE), specifically SAE J1634, as cancelled in October 2002. This proposal spells out EV testing requirements that are similar to SAE J1634, as cancelled in October 2002, and allows continued use of that procedure. In estimating the costs of this action, there is no clear baseline cost that manufacturers of EVs would have incurred in satisfying federal requirements, because existing fuel economy measurements are entir ely specified in terms of exhaust and greenhouse gas emissions. For purposes of the analysis, we assume these EV costs are entirely new costs rather than increments to pre-existing costs. Here and in the facility costs section, this also means we assume no carry-over applications for EVs. Both these assumptions are more likely to lead to an ove rstatement of costs than an understatement. In 2004 the Federal Trade Commission pr omulgated a rule requiring “alternative fueled vehicles” to include a consumer la bel indicating their estimated cruising ranges (69 FR 26926, April 9, 2004; 16 CFR part 309, subpa rt C). The covered vehicles include EVs but not plug-in hybrid electric vehicles (PHEVs). Estimated cruising range for an EV is the range determined according to SAE J1634 (16 CFR 309.22(a)(2)). Consequently, EV manufacturers selling vehicles in the United States have already been subject to the same SAE J1634 testing requi rements allowed in this rulemaking for several years. However, for purposes of th e analysis below we treat the costs of compliance for manufacturers subject to the prop osed rule as new costs in order to insure that they are fully considered in this rulemaking, The salient feature of SAE J1634 for cost purposes is that it requires, similar to a conventional vehicle, the Federal Test Procedur e (FTP or City Test), preceded by vehicle preparation; this is followed by the Highway Test (HFET). The off-cycle tests (USO6, SCO3, cold FTP) are optional under EPA’ s proposal. Furthermore, cruising range determination requires that the FTP be repeat ed until the battery system is no longer able

193 U.S. Environmental Protection Agency, Office of Transportation and Air Quality. “Draft Supporting Statement for Information Collection Request, Fuel Economy Labeling of Motor Vehicles (Proposed Rule), EPA ICR 2392.01.” Compliance and Innovative Strategies Division and Assessment and Standards Division, July, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 148 of 339 to maintain the FTP speed tolerances; the FTP in question is the full four-phase FTP, repeated as cold and hot start “UDDS” or “L A-4” cycles until that point is reached. Preparation costs are estimated to be $3,163 and 30 hours per vehicle, per Information Collection Request (ICR) 0783.54 (OMB 2060-0104), the certification ICR for conventional vehicles. Preparation incl udes several coast downs , a UDDS, and a soak period. The low and high EV test distances fo r FTP and HFET tests are estimated as 50 to 250 miles. For purposes of this estimate, the cost of an FTP/HFET pair is $1,860, allocated 70% to the FTP and 30% to the HFET and incremented either by 50 or 250 divided by 7.45 (the distance of a normal FTP), or by 50 or 250 divided by 10.3 (the distance of the normal HFET). These increases are applied to an estimated five to eight EV families in the years through MY2013. Labor hours, estimated at 30 hours per FTP/HFET pair, are allocated and incremented in a similar manner. The bottom line is a cost between $75,300 and $486,784, and 1,073 to 7,625 hours, per year for the EV industry. ii. Testing Requirements for Plug-in Hybrid Electric Vehicles As explained in Section VI, the propos ed EPA test procedure for PHEVs is an extension of the existing test procedure for hybrid vehicles. Off-cycle tests are already required for test groups that do not meet the “litmus test;” others would use the derived five-cycle adjustment. Hybrid vehicles al ready do FTP and HFET tests for fuel economy determination. The new FTP procedure would essentially run repeated FTPs until the charge is depleted. This is the “charge-dep leting” operation, when the vehicle is mainly running on its battery. The battery would then be recharged, and a si ngle additional fourphase FTP would be conducted in what is de nominated as the “charge-sustain” operation. Following this, the vehicle will be recharge d, if necessary, by running any appropriate test cycle followed by HFET cycles in char ge-depleting operation, followed by a cycle in charge-sustain operation. For purposes of this cost analysis, th e charge-sustain FTP and HFET cycles along with potential other cycles mandated by emissions and fuel economy testing requirements are considered to be continuations of existi ng requirements. The cost increment due to this proposal consequently derives entirely fr om the increased testing time in depleting mode. The duration of the depleting modes is estimated as 7.45 to 50 miles over the repeated 7.45 mile FTP or 10.3 mile HFET test cycles. These together, applied to 5 to 8 families with no carryovers, add an estimated $8,528 to $80,564 in operation and maintenance (O&M) costs and 138 to 923 labor hours to existing hybrid testing costs. b. Printing Costs for New Labels The primary variable cost for the new label design is the difference in cost between black-and-white and color printing. To estimate this cost difference, the agencies note two sources. First, in 2007 the California Air Resources Board (CARB) examined the effects of requiring an environm ental label that include d color printing. It estimated the combined capital and operating costs of color labels to be as low as $0.02Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 149 of 339 per vehicle for large manufacturers; 194 CARB expected small-scale manufacturers to switch to pre-printed color labels at an in cremental cost of $0.05 per label, for a 4-by-6- inch label. Secondly, in 2006 Hewlett-Pack ard estimated the per-page cost of color printing on its HP Color LaserJet 4700n printer as $0.09 per letter-si zed page, and blackand-white printing on a dedicated black-and- white printer as $0.015, for a cost difference of $0.075 per page. 195 The existing fuel economy label measures 4.5 by 7 inches, slightly larger than the CARB label but about 1/3 the size of a standard page. For the cost estimates developed here, the agencies consider a low estimate of $0.03 per labe l in additional printing costs (based on the CARB label, adjusted for si ze), and a high estimate of $0.08 per label (based on the HP estimate, which may overestim ate the cost based on page size). For the number of labels, we estimate the subject fleet from the April 20, 2010, U.S. Department of Transportation’s Summary of Fuel Economy Performance, 196 taking MY2009’s 9.83 million as the low and MY2005’s 15.9 million as the high estimate. This yields a new printing cost of $294,690 to $1,274,634 per year. The O&M costs and labor hours discussed above can be summarized as follows:

194 State of California, Air Resources Board. “Staff Re port: Initial Statement of Reasons for Rulemaking: Proposed Amendments to the Smog Index Vehicle Emissions Label,” May 4, 2007, http://www.climatechange.ca.gov/pu blications/arb/2007-06- 21_isor.pdf , (last acce ssed May 3, 2010). 195 Hewlett-Packard, “Head to head comparison: color versus black-and-white printing,” http://www.officep roductnews.net/files/hpc24 47wpcolorvsbwgov.pdf, (l ast accessed May 4, 2010). 196 U. S. Department of Transportation, National Highway Traffic Safety Administration, “Summary of Fuel Economy Performance,” http://www.nhtsa.gov/staticfiles/rulemaking/pd f/cafe/CAFE_Performance_Report_April_2010.pdf , accessed June 17, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 150 of 339 2. Facility Costs In addition to new equipment (treated as a startup cost, below), the new testing requirements for EVs and PHEVs will in theo ry require expanded te sting facilities for those manufacturers choosing to produce and sell them in the U.S. Because the cost of new facility capacity is highly dependent on manufacturer-specific factors (the costs of capital, the availability of land, the structur e of work shifts, the existing excess capacity, etc.), we use the approximation of unitizi ng increased test costs by assuming that a facility capable of performing 750 FTP/HFET pairs would cost $4 million. Here, the new tests are deemed to require these facilities in proportion to the increases in test time, and the costs are then annualized over ten year s and amortized at 7% interest compounded monthly. This assumption is more likely to produce an overestimate of costs rather than an underestimate, since it does not attempt to account for the current excess capacity that exists in manufacturers’ current test facilities. We assume that there is no excess capacity in our analysis. Note that other features of the EV and PHEV test cycles, such as recharging times, have been harmonized with existing test protocols. Furthermore, consistent with other information burden analyses for the emissions and fuel economy programs, we consider these as ongoing rather than startup costs (i.e ., as the facilities depreciate they are continually being repl aced), another conser vative assumption. Applying these costs to a low and high estimat e of 5 to 8 EV families and 5 to 8 PHEV families per year yields an annualized facilities cost between $25,278 and $210,779 per year. Facility costs can be summari zed as in Table VII.A.2-1: Table VII.A.1-1 Testing Costs (Labor And O&M Costs For Running The Tests)
Vehicle Type/Test Cycle Increase In Number of Tests Increase in Hours
Min Tests Min Cost Increase Max Tests Max Cost Increase Min Max EV Prep 5.0 $18,065 8.0 $28,904 150 240 FTP 5.0 $43,691 8.0 $349,530 705 5,638 HFET 5.0 $13,544 8.0 $108,350 218 1,748 EV Total $75,300 $486,784 1,073 7,625 PHEV FTP 5.0 $6,510 8.0 $50,563 105 705 HFET 5.0 $2,018 8.0 $30,001 33 218 PHEV Total $8,528 $80,564 138 923 Total $83,828 $567,348 1,211 8,548 PRINTING COSTS Number Vehicles Min@$0.03 Number Vehicles Max@$0.08 Color Labels 9, 832,000 $294,690 15,932,920 $1,274,634

TOTAL O&M $378,518 $1,841,981Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 151 of 339 Table VII.A.2-1 Increase In Test Facilities Undepreciated capital costs Minimum Maximum EV test distance increase $154,210 $1,233,683 PHEV test distance increase $22,977 $246,737 Total $177,188 $1,480,420 Amortized, 10yrs @ 7 % $25,278 $210,779 3. Startup Costs Startup costs are counted as one-time cost s that are amortized or discounted at an interest rate of 7% over ten years. a. Updating Information Systems and Testing Equipment The estimate includes the cost of upgrad ing information systems for the estimated 8 to 10 manufacturers who will need to co mply with the new EV and PHEV testing requirements, such as recording multiple tests, recording battery charge data, and communicating the resulting data to the info rmation system that gets it to EPA and the label. Both low and high estimates use 4 w eeks for four IT staff for analysis and code, and 4 weeks for two IT staff for test ing, at $100 per hour, for each manufacturer, resulting in an industry cost of $768,000 to $960,000. In addition, each manufacturer who has not previously produced hybrid-electric vehicles is assumed to need new testing equipment costing $25,000 for an ammeter and $50,000 for voltage stabilizers; we estimate that 5-8 manufacturers will fall in this category. b. Label Redesign The proposed label designs are presente d in Section III. The changes being proposed in this rule would not affect either the existence or size of the label. Auto companies currently have significant flexibil ity in whether fuel economy label should be a stand-alone label or include d in the “Monroney label” (whi ch provides information on the price and options include d for a specific vehicle), or where it is placed on the Monroney label. The agencies are not propos ing any changes to this flexibility. The agencies estimate 16 to 24 hours at $100 per hour for this work, assuming at this time that no specific location or size within the Monroney label is require d. This cost is applied to the universe of separate manufacturer en tities subject to the rule. Many specific automotive brands are parts of marketing groups or are owned and managed by other, parent companies. Allowing for these relations hips, the best guess is that the rule would apply to 24 manufacturers and 11 independe nt commercial importers (ICIs) importing nonconforming vehicles into the U.S. for sale . Applied to 35 companies, then, the label redesign cost is estimated to be $56,000 to $84,000. c. Annualized Startup CostsFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 152 of 339 Total startup costs are between $1.2 and 1.6 million. When annualized and subjected to 7% loan repayment/discoun ting, the startup cost s total $170,711 to $234,069 per year. These are summarized in Table VII.A.3-1:

Table VII.A.3-1

Startup Costs

Item Cost Minimum Maximum Updating Information systems $768,000 $960,000 Ammeter/stabilizer $375,000 $600,000 Label redesign $56,000 $84,000 TOTAL $1,199,000 $1,644,000 Amortized, 10 years at 7% $170,711 $234,069 4. Cost Summary Table VII.A.4-1 summarizes the costs presen ted here. The total costs of this rule, excluding labor, are estimated to be a bout $575,000 to $2,287,000 per year. Adding the cost of labor (estimated to be $61.49 per hour overall) to the above estimates brings the total cost to $648,952 to $2,812,465. Note that star tup capital is not budgeted as labor. EPA and NHTSA request comment on the costs estimates, including any omitted costs and any other information regarding the costs of these requirements.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 153 of 339 Table VII.A.4-1 Total Annual Cost and Hours Increase

COST BURDEN Min Max O&M: testing and label $378,518 $1,841,981 Facility Capital $25,278 $210,779 Startup: one-time IT, label redesign, and reg familiarization, 10 yrs 7% $170,711 $234,069 Total $574,507 $2,286,829

HOURS BURDEN Min Max O&M: testing and label 1,211 8,548 Facility Capital 0 0 Total 1,211 8,548
Labor Cost $74,446 $525,635 Total Costs, Including Labor $648,952 $2,812,465 B. Impact of Proposing One Label to Meet EPCA/EISA As discussed in Section I.C., EPCA a nd EISA create similar but not identical requirements for labeling vehicles. EPA conducts a labeling program under EPCA, and NHTSA is required to conduct a labeling program under EISA, in consultation with EPA. While the agencies could require that manuf acturers produce two separate labels to meet the requirements of the statutes, much of the information on the two labels would be duplicative. In addition, two different fu el economy labels might confuse vehicle purchasers, frustrating the purpose of providi ng fuel economy information to purchasers. Requiring that auto makers put two fuel ec onomy labels on vehicles would also crowd the limited labeling space on vehicles. For these reasons, EPA and NHTSA are proposing to combine both the EPCA and th e EISA requirements into one label. Because NHTSA’s labeling under EISA is a new requirement that has not previously been implemented, there is no cost reduction asso ciated with the proposal to use a joint label. The use of the joint label avoids a cost increase th at would result from two separate labels. EPA and NHTSA are notincluding this cost saving in the cost analysis because we believe that the bene fits of coordinating labeling requirements outweigh any possible disadvantages.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 154 of 339 C. Benefits of Label Changes The benefits of this rule would come from improved provision of information to vehicle buyers, and more informed consumer decisions resulting from the changes. These benefits are difficult to estimate. Doi ng so would require predictions of changes in consumer behavior as a result of the label m odifications. The internet survey discussed in Section IV.A.2 is intended to provide so me insights into the comprehensibility and usefulness of the labels, but the results are no t available at this time. We caution that insights into comprehensibility and usefulness may be limited in predicting changes in consumer behavior due to the proposed label change. Improved fuel economy reduces costs of driving a mile, but the technology to improve fuel economy may increase the cost of a vehicle. Evaluating this tradeoff requires comparing future fuel savings based on expectations of future fuel prices and driving patterns with known and immediate in creases in vehicle purchase price. Some evidence suggests that consumers may not accura tely compare future fuel savings with the up-front costs of fuel-savi ng technology when buying vehicles. 197 As a result, consumers may buy less or more fuel-saving te chnology than is financially sensible for them to buy. This problem may be com pounded by the presence of miles per gallon (MPG) as a primary metric for fuel economy comparison. 198 As discussed in Section II.A.2, consumers can save much more fuel by choosing a 1-MPG improvement in fuel economy for a low-MPG vehicle than by c hoosing a 1-MPG improvement for a highMPG vehicle. However, research on the “MPG illusion” finds that consumers expect a 1- MPG improvement to produce the same fuel sa vings regardless of the efficiency of a vehicle. 199 Thus, the tendency of consumers to use MPG as a primary metric for fuel economy increases the difficulty of estimating the fuel savings resulting from increased fuel economy. As a result, consumers may not be able to find the most cost-effective amount of fuel economy for their driving hab its. For gasoline vehicles, new metrics on the label, such as gallons per hundred miles, fuel savings over 5 years, or environmental metrics, may make it easier for consumers to identify the fuel savings they are likely to receive from a vehicle, and ther efore to judge better between vehicles with different fuel savings, costs, and environmental impacts. Finding the most cost-effective vehicle ma y be even more confusing with the advent of advanced technology vehicles such as EVs or PHEVs. Most consumers are not accustomed to shopping for vehicles that use energy sources other than gasoline. In addition, the cost effectiveness of different technologies depends on a person’s driving patterns. A person with a short commute ma y have lower per-mile costs with a vehicle with some all-electric range, but someone w ith a long commute may have higher per-mile costs or insufficient range with such a ve hicle and may want to consider different technologies. For advanced technology vehicles, the label can help vehicle shoppers to

197 Turrentine, Thomas S., and Kenneth S. Kurani, “Car buyers and fuel economy?” Energy Policy 35 (2007): 1213- 1223. 198 Larrick, Richard P., and Jack B. Soll, “The MPG Illusion.” Science 320 (5883) (June 20, 2008): 1593- 94. 199 Ibid.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 155 of 339 understand the new technologies, an d it can present metrics that allow consumers to make useful comparisons across diffe rent vehicle technologies. EPA and NHTSA request comment on the be nefits described here, and on any additional benefits. D. Summary The prim ary benefits associated with th is proposed rule are associated with improved consumer decision-making resu lting from improved presentation of information. At this time, EPA and NHTSA do not have data to quantify these impacts. The primary costs associated with this proposed rule come from revisions to the fuel economy label and additional testing pro cedures. These costs are estimated to be $649,000 – $2.8 million per year. EPA and NHTSA request comment on this asse ssment of the benefits and costs.

VIII. Agencies’ Statutory Author ity and Executive Order Review s A. Relationship of EPA’s Proposed Requirements With Other Statutes and Regulations 1. Automobile Disclosure Act The Automobile Information Disclosure Act (AIDA) requires the affixing of a retail price sticker to the wi ndshield or side window of new automobiles indicating the Manufacturer's Suggested Retail Price, the “sticker price.” 200 Additional information, such as a list of any optional equipment o ffered or transportation charges, is also required. The Act prohibits the sticker from be ing removed or altered prior to sale to a consumer. Under EPCA, EPA may allow manufacturers of new automobiles to comply with the EPCA labeling requirements by placing th e fuel economy information on the label required by AIDA . 201 Normally, the price sticker label and EPA label are combined as one large label. Failure to maintain the EPA label on the vehicle is considered a violation of AIDA. 2. Internal Revenue Code EPCA requires “Gas Guzzler” tax informa tion to be included on the fuel economy label, under 26 U.S.C. 4064(c)(1). The Inte rnal Revenue code contains the provisions

200 More commonly known as the Monroney Act (Senator Mike Monroney was the chief sponsor of the Act) or Price Sticker Act. See 15 U.S.C. 1231-1233. 201 49 U.S.C. 32908(b)(2).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 156 of 339 governing the administration of the Gas Guzzler Tax. It contains the table of applicable taxes and defines which vehicles are subject to the taxes. The IRS code specifies that the fuel economy to be used to assess the am ount of tax will be the combined city and highway fuel economy as determined by using the procedures in place in 1975, or procedures that give comparable results (s imilar to EPCA's requirements for determining CAFE for passenger automobiles). This pr oposal would not impact these provisions. 3. Clean Air Act EPCA states that fuel economy tests shall, to the extent practi cable, be carried out with the emissions tests required under Section 206 of the Clean Air Act. 202 EPA is not proposing additional emissions tests. 4. Federal Trade Commission Guide Concerning F uel Economy Advertising for New Vehicles In the mid-1970's when EPCA was passed, the Federal Trade Commission (FTC) “took note of the dramatic increase in the number of fuel economy claims then being made and of the proliferation of test procedures then being used as the basis for such claims.” 203 They responded by promulgating regulations in 16 CFR part 259 entitled “Guide Concerning Fuel Economy Advertising for Ne w Vehicles” (“Fuel Guide”). The Fuel Guide, adopted in 1975 and subsequently revise d twice, provides guidance to automobile manufacturers to prevent deceptive advertising and to facilitate th e use of fuel economy information in advertising. The Fuel Guid e advises vehicle manuf acturers and dealers how to disclose the established fuel ec onomy of a vehicle, as determined by the Environmental Protection Agency's rules pursuant to the Automobile Information Disclosure Act (15 U.S.C. 2996), in advertisem ents that make representations regarding the fuel economy of a new vehicle. 204 The disclosure is tied to the claim made in the advertisement. If both city and highway fu el economy claims are made, both city and highway EPA figures should be disclosed. A cl aim regarding either city or highway fuel economy should be accompanied by the corresponding EPA figure. A general fuel economy claim would trigger disclosure of th e EPA city figure, although the advertiser would be free to state the highway figure as well. The authority for the Fuel Guide is tied to the Federal Trade Commission Act (15 U.S. C. 41-58) which, briefly stated, makes it illegal for one to engage in “unfair methods of competition in or affecting commerce and unfair or deceptive acts or practic es in or affecting commerce.” 5. California Environmental Performance Label California requires each new and used vehicl e offered for sale in the state to affix a “Smog Index Number” and “Global Warmi ng Index” decal to the car window which indicates the pollution standard that applie s to that particular car, and its exhaust

202 49 U.S.C. 32904(c). 203 40 FR 42003, Sept. 10, 1975. 204 43 FR 55747, Nov. 29, 1978; and 60 FR 56230, Nov. 8, 1995.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 157 of 339 emissions. 205 This proposal would not impact California’s regulations. The Global Warming index on California’s label includes emissions from fuel production ( http://www.driveclean.ca.gov /im ages/ep_label_large.jpg ). B. Statutory and Executive Order Reviews 1. Executive Order 12866: Regulatory Planning and Review and DOT Regulatory Policies and Pr ocedures (NHTSA only) Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is a "significant regulatory action” because the action raises novel legal or policy issues. Accordingly, EPA and NHTSA submitted this action to the Office of Management and Budget (OMB) for review under E.O. 12866 and any changes made in response to OMB recommendations have been documented as OMB requests in the docket for this action. NHTSA is also subject to the Departme nt of Transportation’ s Regulatory Policies and Procedures. This proposed rule is also significant within th e meaning of the DOT Regulatory Policies and Procedures. E.O. 12866 also requires NHT SA to submit this action to OMB for review and document any changes made in response to OMB recommendations In addition, EPA and NHTSA both prepared an analysis of the potential costs and benefits associated with this action. This an alysis is available in Section VII of this document. 2. Paperwork Reduction Act The information collection requirement s in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . The Information Collection Request (ICR) document prepared by EPA has been assigned EPA ICR number 2239.01. Since this is a joint proposal, the burden associ ated with these information collection requirements could be attributed to either ag ency. However, since a significant portion of the burden result from new EPA testing re quirements, EPA has agreed to assume responsibility for the complete paperwork burden. Both ag encies will consider the comments submitted regarding these potential cost s as part of their decision in the final rule. The information being collected is used by EPA to calculate the fuel economy estimates that appear on new automobile, light truck and medium -duty passenger vehicle sticker labels. EPA currently collects this in formation annually as part of its vehicle certification and fuel economy program, and will continue to do so. This proposed rule changes some of the content of the informa tion submitted. Responses to this information collection are mandatory to obtai n the benefit of vehicle certifi cation under Title II of the Clean Air Act (42 U.S.C. 7521 et seq. ) and as required under Title III of the Motor

205 SB 2050 (Presley), Chapter 1192, Statutes of 1994, and AB 1229 (2005).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 158 of 339 Vehicle Information and Cost Savings Act (15 U.S.C. 2001 et seq. ). Information submitted by manufacturers is held as confiden tial until the specific vehicle to which it pertains is available for purchase. After vehicles are available for purchase, most information associated with the manufacturer’s application is available to the public. Under section 208 of the Clean Air Act (42 U. S.C. 7542(c)), all info rmation, other than trade secret processes or methods, must be publicly availa ble. Proprietary information is granted confidentiality in accordance with the Freedom of Information Act, EPA regulations at 40 CFR part 2, and class determinations issu ed by EPA’s Office of General Counsel. The projected yearly increas ed cost within the three- year horizon of the pending information collection request is $2,812,000 including $2,286,000 in operations and maintenance costs and $526,000 in labor co sts. The estimated number of likely respondent manufacturers is 35. Responses ar e submitted annually by engine family, with the number of responses per respondent va rying widely depending on the number of engine families being certified. Under the current fuel economy information authorization, an average of 12.2 responses a year are approved for each of 33 respondents requiring 451.2 hours per response and 80 hours of recordkeeping at a total cost of $10,012 per response for an industry total of 184,127 hours and $4,274,932 million annually, including capital and operati ons and maintenance costs. Burden is defined at 5 CFR 1320.3(b). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. To comment on the EPA's need for this information, the accuracy of the provided burden estimates, and any suggested met hods for minimizing respondent burden, EPA has established a public docket for this rule , which includes this ICR, under Docket ID number EPA-HQ-OAR-2009-0865. Submit any comments related to the ICR to EPA and OMB. See ADDRESSES section at the beginning of this notice for where to submit comments to EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budge t, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA. Sin ce OMB is required to make a decision concerning the ICR between 30 and 60 days after [Insert date of publication in the Federal Register.] , a comment to OMB is best assured of having its full effect if OMB receives it by [Insert date 30 days after public ation in the Federal Register.] . The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposal. 3. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) gene rally requires agencies to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Proce dure Act or any other statute unless the agencies certify that the rule will not have a significant ec onomic impact on a substantialFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 159 of 339 number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of th is proposed rule on small entities, a small entity is defined as: (1) A small business as defined by the Small Business Administration (SBA) by category of bus iness using North America Industrial Classification System (NAICS) and codi fied at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, c ounty, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently ow ned and operated and is not dominant in its field. Table VIII.B.3-1 provides an overview of the primary SBA small business categories included in the light- duty vehicle sector that are subject to the proposed rule:

Table VIII.B.3-1 Primary SBA Small Busine ss Categories in the Light-Duty Vehicle Sector Industry Defined as small entity by SBA if less

than or equal to: NAICS Codes a

Light-duty vehicles: - vehicle manufacturers - independent commercial importers

- automobile dealers

- stretch limousine manufacturers and hearse manufacturers 1,000 employees $7 million annual sales $23 million annual sales 100 employees

$29 million annual sales 1,000 employees 336111 811111, 811112, 811198 441120 423110

441110

336211

Notes:

a North American Industri al Classification System After considering the economic impact s of today’s proposed rule on small entities, we certify that this action will not have a significant economic impact on a substantial number of small entities. Th e small entities directly regulated by this proposed rule cover several types of small businesses including vehicle manufacturers, automobile dealers, limousine and hearse manufacturers, and independent commercial importers (ICIs). ICIs are companies that impor t used vehicles into the U.S. that must be certified for emissions compliance and la beled for fuel economy purposes. Small governmental jurisdictions and small organi zations as described above will not be impacted. We have determined that the estimat ed effect of the proposed rule is to impactFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 160 of 339 1 small business vehicle manufacturer and 11 ICIs who currently certify vehicles with costs less than one percent of revenues. Th ese 12 companies represent all of the small businesses impacted by the proposed regulations . The proposed regulations will have no new impacts on small business automobile dealers or small business limousine and hearse manufacturers. An analysis of the impacts of the proposed rule on small businesses has been prepared and placed in the docket for this rulemaking. 206 Although this proposed rule will not have a significant imp act on a substantial number of small entities, we nonetheless have tr ied to reduce the impact of this rule on small entities. EPA is proposing to reduce the testing burden on ICIs that would be needed for the fuel economy label. Under the proposal, ICIs would be allowed to test over two driving cycles when determining the fuel economy estimate for the fuel economy label instead of testing over five driving cycles as required for vehicle manufacturers. Both agencies continue to be interested in the potential imp acts of the proposed rule on small entities and welcome comments on the small business analysis and other issues related to impacts on small businesses. 4. Unfunded Mandates Reform Act This proposed rule does not contain a Federal mandate that may result in expenditures of $100 million (adjusted for inflatio n) or more for State, local, and tribal governments, in the aggregate, or the private se ctor in any one year. This rule contains no federal mandates for state, local, or tribal governments as defined by the provisions of Title II of the UMRA. The rule imposes no enforceable duties on any of these governmental entities. Nothing in the rule would signifi cantly or uniquely affect small governments. The proposed rule only affects vehicle manufacturer s and the agencies es timate annual costs of less than $100 million (adjusted for inflation). EPA and NHTSA believe that the proposal represents the least costly, most cost-eff ective approach to achieve the statutory requirements of the rule. The agencies’ estimat ed costs are provided in section VI. Thus, this rule is not subject to the requirements of se ctions 202 or 205 of UMRA. This rule is also not subject to the re quirements of section 203 of UMRA because it contains no regulatory require ments that might significantly or uniquely affect small governments. As noted above, the proposed rule only affects vehi cle manufacturers. 5. Executive Order 13132: Federalism This action does not have federalism imp lications. It will not have substantial direct effects on the States, on the relations hip between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132

. This rulemaking would apply to manufacturers of motor vehicles and not to state or local governments. Thus, Executive

206 “Screening Analysis: Small Business Impacts from Revisions to Motor Vehicle Fuel Economy Label,” EPA report, August 12, 2010.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 161 of 339 Order 13132 does not apply to this action

. Although section 6 of Executive Order 13132 does not apply to this action, EPA and NHTSA did consult with representatives of state governments in developing this action.

In the spirit of Executive Or der 13132, and consistent with the agencies’ policy to promote communications between Federal, St ate and local governments, the agencies specifically solicits comment on this proposed action from State and local officials. 6. Executive Order 13175: Consultation a nd Coordination W ith Indian Tribal Governments This action does not have tribal impli cations, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000)

. This proposed rule woul d be implemented at the Federal level and imposes compliance cost s only on vehicle manufacturers. Tribal governments would be affected only to the extent they purchase and use regulated vehicles. Thus, Executive Order 13175 does not apply to this action. The agencies specifically solicit additional comment on this proposed action from tribal officials. 7. G. Executive Order 13045: Protecti on of Children from Environmental Health and Safety Risks EPA and NHTSA interpret E.O. 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under secti on 5-501 of the E.O. has the potential to influence the regulation. This action is not subject to E.O. 13045 because it does not establish an environmental standard intended to mitigate health or safety risks. 8. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The proposed regulations do not require manufacturers to improve or ot herwise change the fu el economy of their vehicles. The purpose of this proposed regulation is to provide consumers with better information on which to base their vehicle purchasing decisions. Therefore, we have concluded that this rule is not like ly to have any adverse energy effects. 9. National Technology Transfer Advancement Act Section 12(d) of the Na tional Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113 (15 U.S.C. 272 note) directs the agencies to use voluntary consensus standards in its regulat ory activities unless to do so would be inconsistent with applicable law or otherw ise impractical. Voluntary consensus standards are technical standards (e.g., materials specifi cations, test methods, sampling procedures,Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 162 of 339 and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs the agencies to pr ovide Congress, through OMB, explanations when the Agency decides not to use avai lable and applicable voluntary consensus standards. EPA’s portion of this proposed rulemaking involves technical standards. EPA proposes to use elements of testing standard s developed with the Society of Automotive Engineers (SAE). Where possible, EPA proposes to incorporate by re ference portions of SAEJ1711, SAE J2841, and SAE J1634. At the tim e of this proposal, all the above SAE documents are either open for update or in the process of balloting prior to publishing. SAE reference documents can be obtained at www.SAE.org . In the absence of final published reference documents, EPA is proposi ng procedures that may differ from final SAE procedures. Also, differences between EPA proposed procedures and final SAE procedures may be due to st atutory or existing regulatory EPA requirements, worst case emissions testing requirements by EPA, and th e need for EPA to address policy concerns and concerns of manufacturers not involve d in developing SAE procedures. EPA welcomes comments on this asp ect of the proposed rulemaking and, specifically, invites the public to identif y potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation. 10. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations. Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. It s main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressi ng, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. The agencies have determined that this proposed rule will not have disproportionately high and a dverse human health or envi ronmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The proposed regulations do not require manufacturers to improve or otherwise change the emissions control or fuel economy of their vehicles. The purpose of this proposed regula tion is to provide consumers with better information on which to base their vehicle purchasing decisions. List of Subjects
40 CFR Part 85 Confidential business information, Imports, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirement s, Research, Warranties. 40 CFR Part 86Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 163 of 339 Administrative practice and procedure, Confidential bus iness information, Labeling, Motor vehicle pollution, Reporting a nd recordkeeping requirements. 40 CFR Part 600 Administrative practice a nd procedure, Electric power, Fuel economy, Labeling, Reporting and recordkeeping requirements.
49 CFR Part 575 Administrative practice and procedure, Consumer prot ection, Fuel economy, Motor vehicles, Motor vehicle safety, Repor ting and recordkeeping requirements.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 164 of 339 Environmental Protection Agency

40 CFR Chapter I

For the reasons set forth in the preamble, the Environmental Prot ection Agency proposes to amend parts 85, 86 and 600 of title 40, Chapter I of the Code of Federal Regulations as follows:

PART 85—CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

1. The authority citation for part 85 continues to read as follows: Authority: 42 U.S.C. 7401–7671q.

Subpart T—[Amended]

2. Section 85.1902 is amended by revising pa ragraph (b)(2) to read as follows: § 85.1902 Definitions.
* * * * * (b) * * * (2) A defect in the design, mate rials, or workmanship in one or more emissions control or emission-related parts, components, systems, software or elements of design which must function properly to ensure continued co mpliance with vehicle greenhouse gas emission requirements, including compliance with CO 2 , CH 4 , N 2 O, and carbon-related exhaustFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 165 of 339 emission standards;
* * * * *

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES AND ENGINES

3. The authority citation for part 86 continues to read as follows: Authority: 42 U.S.C. 7401-7671q.

Subpart B – [Amended]

4. Section 86.165-12 is amended by revising pa ragraph (d)(4) to read as follows: § 86.165-12 Air conditioning idle test procedure. * * * * * (d) * * * (4) Measure and record the continuous CO 2 concentration for 600 seconds. Measure the
CO 2 concentration continuously using raw or dilute sampling procedures. Multiply this concentration by the continuous (raw or d ilute) flow rate at the emission sampling location to determine the CO 2 flow rate. Calculate the CO 2 cumulative flow rate continuously over the test interval. This cumu lative value is the total mass of the emitted
CO 2 . Alternatively, CO 2 may be measured and recorded using a constant velocity sampling system as described in §§ 86.106-96(a)(2) and 86.109-94.
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Page 166 of 339 Subpart S — [Amended]

5. Section 86.1818-12 is amended by adding pa ragraph (b)(3) and revising paragraphs (c)(1) and (d) to read as follows: § 86.1818-12 Greenhouse gas emission standards for light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles.
* * * * * (b) * * * (3) Manufacturer has the mean ing given by the Department of Transportation at 49 CFR
531.4. (c) * * * (1) For a given individual model year's production of passenger automobiles and light trucks, manufacturers must comply with a full useful life fleet average CO 2 standard calculated according to the provi sions of this paragraph (c). Manufacturers must calculate separate full useful life fleet average CO 2 standards for their passenger automobile and light truck fleets, as those te rms are defined in this sec tion. Each manufacturer's fleet average CO 2 standards determined in this paragr aph (c) shall be expressed in whole grams per mile, in the model year specified as applicable. Manufactur ers eligible for and choosing to participate in the Temporary L eadtime Allowance Alte rnative Standards for qualifying manufacturers specifie d in paragraph (e) of this section shall not include vehicles subject to the Temporary Leadtim e Allowance Alternativ e Standards in the calculations of their primary pa ssenger automobile or light truck standards determined inFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 167 of 339 this paragraph (c). Manufacturers shall de monstrate compliance with the applicable standards according to th e provisions of § 86.1865–12.
* * * * * (d) In-use CO 2 exhaust emission standards . The in-use exhaust CO 2 emission standard shall be the combined city/highway carbon-re lated exhaust emission value calculated for the appropriate vehicle carline/subconfigur ation according to the provisions of § 600.113–12(g)(4) of this chapter multiplied by 1.1 and rounded to the nearest whole gram per mile. For in-use vehicle carlines/s ubconfigurations for which a combined city/highway carbon-related exhaust emissi on value was not determined under § 600.113- 12(g)(4) of this chapter, the in-use exhaust CO 2 emission standard shall be the combined city/highway carbon-related exhaust emi ssion value calculated according to the provisions of § 600.208–12 of this chapter for the vehicle mode l type (except that total model year production data shall be used in stead of sales projections) multiplied by 1.1 and rounded to the nearest whole gram per mile. For vehicles that are capable of operating on multiple fuels, including but not limited to alcohol dual fuel, natural gas dual fuel and plug-in hybrid electric vehicl es, a separate in-use standard shall be determined for each fuel that the vehicle is capable of operating on. These standards apply to in-use testing perf ormed by the manufacturer pursu ant to regulations at §§ 86.1845–04 and 86.1846–01 and to in-use testing performed by EPA.
* * * * *

6. Section 86.1823-08 is amended by revising paragraphs (m)(2)(iii) and (m)(3) to read as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 168 of 339 § 86.1823-08 Durability demonstration procedures for exhaust emissions.
* * * * * (m) * * * (2) * * * (iii) For the 2012 through 2014 model years only, manufacturers may use alternative deterioration factors. For N 2 O, the alternative deterioration factor to be used to adjust FTP and HFET emissions is the additive or mu ltiplicative deterioration factor determined for (or derived from) NO X emissions according to the provisions of this section. For CH 4 , the alternative deterioration f actor to be used to adjust FTP and HFET emissions is the addititive or multiplicative deterioration factor determined for (or derived from) NMOG or NMHC emissions according to the provisions of this section.
* * * * * (3) Other carbon-related exhaust emissions . Deterioration factors shall be determined according to the provisions of paragraphs (a ) through (l) of this section. Optionally, in lieu of determining emission-specific FT P and HFET deterioration factors for CH 3 OH (methanol), HCHO (formaldehyde), C 2 H 5 OH (ethanol), and C 2 H 4 O (acetaldehyde), manufacturers may use the additive or multiplicative deterioration factor determined for (or derived from) NMOG or NMHC emissions according to the provisions of this section.
* * * * *

7. Section 86.1841–01 is amended by revising pa ragraph (a)(3) to read as follows: § 86.1841-01 Compliance with emission standards for the purpose of certification. (a) * * *Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 169 of 339 (3) Compliance with full useful life CO 2 exhaust emission standards shall be demonstrated at certification by the certif ication levels on the FTP and HFET tests for carbon-related exhaust emissions determined according to § 600.113-12 of this chapter.
* * * * *

8. Section 86.1848–10 is amended by revising para graph (c)(9)(i) to read as follows: § 86.1848-10 Compliance with emission standards for the purpose of certification.
* * * * * (c) * * * (9) * * * (i) Failure to meet the fleet average CO 2 requirements will be c onsidered a failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the vehicles sold in violation of the fleet average CO 2 standard will not be covered by the certificate(s). The vehicles sold in viol ation will be determined according to § 86.1865– 12(k)(8).
* * * * *

9. Section 86.1865–12 is amended by revising para graphs (a)(1) introductory text, (d), (j)(1), (k)(8)(iii) through (v), and (k)(9)(iv)(B) to read as follows: § 86.1865-12 How to comply with the fleet average CO 2 standards. (a) * * * (1) Unless otherwise exempted under the provisions of § 86.1801–12(j) or (k), CO 2 fleet average exhaust emission standards apply to:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 170 of 339 * * * * * (d) Small volume manufacturer certification procedures . Certification procedures for small volume manufacturers are provided in § 86.1838–01. Small businesses meeting certain criteria may be exempted from the greenhouse gas emission standards in § 86.1818–12 according to the provisions of § 86.1801–12(j) or (k).
* * * * * (j) * * * (1) Compliance and enforcement requiremen ts are provided in this section and § 86.1848–10(c)(9).
* * * * * (k) * * * (8) * * * (iii) EPA will determine the vehicles not c overed by a certificate because the condition on the certificate was not satisfi ed by designating vehicles in those test groups with the highest carbon-related exhaust emission va lues first and continuing until reaching a number of vehicles equal to the calculated number of noncomplying vehicles as determined in paragraph (k)(8) of this section. If this calc ulation determines that only a portion of vehicles in a test group contribu te to the debit situation, then EPA will designate actual vehicles in th at test group as not covered by the certificate, starting with the last vehicle produced and counting backwards. (iv)(A) If a manufacturer ceases producti on of passenger cars and light trucks, the manufacturer continues to be responsible for offsetting any debits outstanding within the required time period. Any failure to offset the debits will be considered a violation ofFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 171 of 339 paragraph (k)(8)(i) of this section and may subject the manufacturer to an enforcement action for sale of vehicles not covered by a certificate, pursuant to paragraphs (k)(8)(ii) and (iii) of this section. (B) If a manufacturer is purch ased by, merges with, or othe rwise combines with another manufacturer, the controlling entity is respons ible for offsetting any debits outstanding within the required time period. Any failure to offset the de bits will be considered a violation of paragraph (k)(8)(i) of this section and may s ubject the manufacturer to an enforcement action for sale of vehicles not covered by a certificate, pursuant to paragraphs (k)(8)(ii) and (iii) of this section. (v) For purposes of calculating the statute of limitations, a violati on of the requirements of paragraph (k)(8)(i) of this section, a failure to satisfy the conditions upon which a certificate(s) was issued and hence a sale of vehicles not covered by the certificate, all occur upon the expiration of the deadline for offsetting debits speci fied in paragraph (k)(8)(i) of this section. (9) * * * (iv) * * * (B) Failure to offset the debits within the re quired time period will be considered a failure to satisfy the conditions upon which the certif icate(s) was issued and will be addressed pursuant to paragraph (k )(8) of this section.
* * * * *

10. Section 86.1867–12 is amended by revising para graphs (a)(3)(iv)(A), (a)(3)(iv)(F),Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 172 of 339 (a)(3)(vi), (a)(4), and (b)(2) to read as follows: § 86.1867-12 Optional early CO 2 credit programs.
* * * * * (a) * * * (3) * * * (iv) * * * (A) Total model year sales data will be us ed, instead of production data, except that vehicles sold in California and the section 177 states determined in paragraph (a)(2)(i) of this section shall not be included.
* * * * * (F) Electric, fuel cell, and plug-in hybrid electric mode l type carbon-related exhaust emission values shall be included in the fleet average determined under paragraph (a)(1) of this section only to the extent that such vehicles are not being used to generate early advanced technology vehicle credits unde r paragraph (c) of this section.
* * * * * (vi) Credits are earned on th e last day of the model year. Manufacturers must calculate, for a given model year, the number of credits or debits it has genera ted according to the following equation, rounded to the nearest megagram:
CO 2 Credits or Debits (Mg) = [(CO 2 Credit Threshold

− Manufacturer's Sales Weighted Fleet Average CO 2 Emissions) × (Total Number of Ve hicles Sold) × (Vehicle Lifetime Miles)] ÷ 1,000,000 Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 173 of 339 CO 2 Credit Threshold = the applicable credit threshold value for the model year and vehicle averaging set as determined by paragraph (a)(3)(vii) of this section; Manufacturer's Sales Weighted Fleet Average CO 2 Emissions = average calculated according to paragraph (a)(3)(vi) of this section; Total Number of Vehicles Sold = The number of vehicles domestically sold as defined in § 600.511–80 of this chapter except that vehicles sold in California and the section 177 states determined in paragraph (a)(2)(i) of this section shall not be included; and Vehicle Lifetime Miles is 195,264 for the LDV/LDT1 averaging set and 225,865 for the LDT2/HLDT/MDPV averaging set.
* * * * * (4) Pathway 4. Pathway 4 credits are those cr edits earned under Pathway 3 as described in paragraph (a)(3) of this section in the set of states that does not include California and the section 177 states determined in paragra ph (a)(2)(i) of this section and calculated according to paragraph (a)(3) of this secti on. Credits may only be generated by vehicles sold in the set of states th at does not include California and the section 177 states determined in paragraph (a )(2)(i) of this section. (b) * * * (2) Manufacturers that select Pathway 4 as de scribed in paragraph (a)(4) of this section may not generate early air conditioning credits for vehicles sold in California and the section 177 states as determined in pa ragraph (a)(2)(i) of this section.
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Page 174 of 339 PART 600— FUEL ECON OMY AND CARBON
‐ RELATED EXHAUST EMISSIONS OF MOTOR

VEHICLES

11. The authority citation for part 600 continues to read as follows: Authority: 49 U.S.C. 32901—23919q, Pub. L. 109–58. Subpart A—General Provisions

12. The heading for subpart A is revised as set forth above. § 600.001-08, § 600.001-86, § 600.001-93, § 600.002-85, § 600.002-93, § 600.004-77, § 600.006-86, § 600.006-87, § 600.006-89, § 600.007-80, § 600.008-01, § 600.008-77, § 600.010-86—[Removed]

13. Subpart A is am ended by rem oving the following sections: § 600.001-08 § 600.001-86 § 600.001-93 § 600.002-85 § 600.002-93 § 600.004-77 § 600.006-86 § 600.006-87 § 600.006-89 § 600.007-80 § 600.008-01 § 600.008-77Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 175 of 339 § 600.010-86

14. Redesignate §§ 600.001-12 through 600.011-93 as follows: 

### old section new section § 600.001

‐ 12 § 600.001 § 600.002

‐ 08 § 600.002 § 600.003

‐ 7 7 § 600.003 § 600.005

‐ 81 § 600.005 § 600.00 6

‐ 08 § 600.00 6 § 600.00 7

‐ 08 § 600.00 7 § 600.008

‐ 08 § 600.008 § 600.009

‐ 85 § 600.009 § 600.010

‐ 08 § 600.010 § 600.011

‐ 93 § 600.011

15. The redesignated § 600.001 is re vised to read as follows: § 600.001 General applicability. (a) The provisions of this part apply for 2008 and later model year automobiles that are not medium duty passenger vehicles, and to 2011 and later model year automobiles including medium-duty passenger vehicles. (b) The provisions of subparts A, D, and F of this part are optional through the 2011 model year in the following cases: (1) Manufacturers that produce only electric ve hicles are exempt from the requirements of this subpart, except with regard to th e requirements in thos e sections pertaining specifically to electric vehicles. (2) Manufacturers with worldwide production (excluding electric ve hicle production) of less than 10,000 gasoline-fueled and/or dies el powered passenger automobiles and light trucks may optionally comply with the electr ic vehicle requirements in this subpart.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 176 of 339 (c) Unless stated otherwise, references to fu el economy or fuel economy data in this part shall also be interpreted to mean the related exhaust emissions of CO 2 , HC, and CO, and where applicable for alternative fuel vehicles, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC and CH 4 . References to average fuel economy sha ll be interpreted to also mean average carbon-related exhaust emissions. References to fuel economy data vehicles shall also be meant to refer to vehicles tested for car bon-related exhaust emissions for the purpose of demonstrating compliance with fleet average CO 2 standards in § 86.1818 of this chapter. (d) The model year of initial applicability fo r sections in this part is indicated by the section number. The two digits following th e hyphen designate the first model year for which a section is applicable. An individua l section continues to apply for later model years until it is replaced by a different section that applies starting in a later model year. Sections that have no two-digit suffix appl y for all 2008 and later model year vehicles, except as noted in those secti ons. If a section has a two- digit suffix but the regulation references that section without including the two-digit suffix, this re fers to the section applicable for the appropriate model year. This also applies for refere nces to part 86 of this chapter. Example: Section 600.113–08 applies to the 2008 and subsequent model years until § 600.113–12 is applicable beginning with th e 2012 model year. Section 600.111–08 would then apply only for 2008 th rough 2011 model year vehicles.

16. The redesignated § 600.002 is re vised to read as follows: § 600.002 Definitions. The following definitions apply throughout this part:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 177 of 339 3-bag FTP means the Federal Test Procedure specified in part 86 of this chapter, with three sampling portions consisting of the cold-s tart transient (“Bag 1”), stabilized (“Bag 2”), and hot-start transient phases (“Bag 3”). 4-bag FTP means the 3-bag FTP, with the addition of a sampling portion for the hot-start stabilized phase (“Bag 4”). 5-cycle means the FTP, HFET, US06, SC03 and cold temperature FTP tests as described in subparts B and C of this part.
Administrator means the Administrator of the Envi ronmental Protection Agency or his authorized representative.
Alcohol means a mixture containing 85 percent or more by volume methanol, ethanol, or other alcohols, in any combination. Alcohol-fueled automobile means an automobile designed to operate exclusively on alcohol. Alcohol dual fuel automobile means an automobile: (1) Which is designed to operate on alcohol and on gasoline or diesel fuel; and (2) Which provides equal or greater energy effi ciency as calculated in accordance with § 600.510-08(g)(1) or § 600.510-12(g)(1) while ope rating on alcohol as it does while operating on gasoline or diesel fuel; and (3) Which, in the case of passenger automobile s, meets or exceeds the minimum driving range established by the Department of Transportation in 49 CFR part 538.
Automobile has the meaning given by the Departme nt of Transportation at 49 CFR 523.3. This includes “passenger automobiles” a nd “non-passenger automobiles” (or “light trucks”).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 178 of 339 Auxiliary emission control device (AECD) means an element of design as defined in § 86.1803 of this chapter. Average fuel economy means the unique fuel economy value as computed under § 600.510 for a specific class of automobiles produced by a manufacturer that is subject to average fuel economy standards.
Axle ratio means the number of times the input shaft to the di fferential (or equivalent) turns for each turn of the drive wheels.
Base level means a unique combination of basic engine, inertia weight class and transmission class.

Base tire means the tire specified as standa rd equipment by the manufacturer.
Base vehicle means the lowest priced version of e ach body style that makes up a car line. Basic engine means a unique combination of manufact urer, engine disp lacement, number of cylinders, fuel system (e.g., type of fuel in jection), catalyst usage, and other engine and emission control system characteristics specified by the Administrator. For electric vehicles, basic engine means a unique combin ation of manufacturer and electric traction motor, motor controller, batte ry configuration, electrical charging system, energy storage device, and other components as specified by the Administrator. Battery configuration means the electrochemical type, voltage, capacity (in Watt-hours at the c/3 rate), and physical char acteristics of the battery used as the tractive energy device. Body style means a level of commonality in vehicl e construction as defined by number of doors and roof treatment (e.g., sedan, convertib le, fastback, hatchback) and number of seats ( i.e. , front, second, or third seat) requiring seat belts pursuant to National HighwayFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 179 of 339 Traffic Safety Administration safety regulations in 49 CF R part 571. Station wagons and light trucks are identified as car lines.
Calibration means the set of specifications, includi ng tolerances, unique to a particular design, version of application of a compone nt, or component assembly capable of functionally describing its ope ration over its working range. Carbon-related exhaust emissions (CREE) means the summation of the carboncontaining constituents of the exhaust emissions, with each constituent adjusted by a coefficient representing the ca rbon weight fraction of each c onstituent relative to the CO 2 carbon weight fraction, as specified in § 600.113. For example, carbon-related exhaust emissions (weighted 55 percen t city and 45 percent highway ) are used to demonstrate compliance with fleet average CO 2 emission standards outlin ed in § 86.1818 of this chapter.
Car line means a name denoting a group of vehicles within a make or car division which has a degree of commonality in constr uction (e.g., body, chassi s). Car line does not consider any level of decor or opulence and is not generally distinguished by characteristics as roof line, number of doors, seats, or windows, except for station wagons or light-duty trucks. Station wagons and light- duty trucks are considered to be different car lines than passenger cars. Certification vehicle means a vehicle which is select ed under § 86.1828 of this chapter and used to determine compliance under § 86.1848 of this chapter for issuance of an original certificat e of conformity.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 180 of 339 City fuel economy means the city fuel economy determined by operating a vehicle (or vehicles) over the driving sche dule in the Federal emission test procedure, or determined according to the vehicle-specific 5-cycle or derived 5-cycle procedures. Cold temperature FTP means the test performed under the provisions of subpart C of part 86 of this chapter. Combined fuel economy means: (1) The fuel economy value determined fo r a vehicle (or vehicles) by harmonically averaging the city and highway fuel economy values, weighted 0.55 and 0.45 respectively. (2) For electric vehicles, the term means the equivalent petroleum-based fuel economy value as determined by the calculation pr ocedure promulgated by the Secretary of Energy. Dealer means a person who resides or is located in the United States, any territory of the United States, or the District of Columbia a nd who is engaged in th e sale or distribution of new automobiles to the ultimate purchaser. Derived 5-cycle fuel economy means the 5-cycle fuel economy derived from the FTPbased city and HFET-based highway fuel econo my by means of the equation provided in § 600.210. Diesel equivalent gallon means an amount of electrici ty or fuel with the energy equivalence of one gallon of diesel fuel. For purposes of this part, one gallon of gasoline is equivalent to 36.7 kilowatt-hours of electricity. Drive system is determined by the number and location of drive axles (e.g., front wheel drive, rear wheel drive, four wheel drive) a nd any other feature of th e drive system if theFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 181 of 339 Administrator determines that such othe r features may result in a fuel economy difference. Electrical charging system means a device to convert 60 Hz alternating electric current, as commonly available in resi dential electric service in the United States, to a proper form for recharging the energy storage device.
Electric traction motor means an electrically powered motor which provides tractive energy to the wheels of a vehicle.
Electric vehicle has the meaning given in § 86.1803 of this chapter. Energy storage device means a rechargeable means of storing tractive energy on board a vehicle such as storage batteries or a flywheel. Engine code means a unique combination, within an engine-system combination (as defined in § 86.1803 of this chapter), of displ acement, fuel injection (or carburetion or other fuel delivery system), calibration, distributor calibration, choke calibration, auxiliary emission control devices, and ot her engine and emission control system components specified by the Administrator. Fo r electric vehicles, engine code means a unique combination of manufacturer, electric traction motor, motor configuration, motor controller, and energy storage device. Federal emission test procedure (FTP) refers to the dynamometer driving schedule, dynamometer procedure, and sampling and analytic al procedures described in part 86 of this chapter for the re spective model year, which are used to derive city fuel economy data. Footprint has the meaning given in § 86.1803 of this chapter.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 182 of 339 FTP-based city fuel economy means the fuel economy determined in § 600.113 of this part, on the basis of FTP testing.
Fuel means: (1) Gasoline and diesel fuel for gasoli ne- or diesel-powered automobiles; or (2) Electrical energy for electri cally powered automobiles; or (3) Alcohol for alcohol-pow ered automobiles; or (4) Natural gas for natural gas-powered automobiles; or (5) Liquid Petroleum Gas (LPG), commonly re ferred to as “propane,” for LPG-powered automobiles; or (6) Hydrogen for hydrogen fuel cell automob iles and for automobiles equipped with hydrogen internal combustion engines.
Fuel cell has the meaning given in § 86.1803 of this chapter.
Fuel cell vehicle has the meaning given in § 86.1803 of this chapter. Fuel economy means: (1) The average number of miles traveled by an automobile or group of automobiles per volume of fuel consumed as calculated in this part; or (2) For the purpose of calculating average fuel economy pursuant to the provisions of part 600, subpart F, fuel economy for electrically powered automobiles means the equivalent petroleum-based fuel economy as determined by the Secretary of Energy in accordance with the provisions of 10 CFR 474. Fuel economy data vehicle means a vehicle used for the purpose of determining fuel economy which is not a certification vehicle.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 183 of 339 Gasoline equivalent gallon means an amount of electricity or fuel with the energy equivalence of one gallon of gaso line. For purposes of this part, one gallon of gasoline is equivalent to 33.705 kilowatt-hours of electricity or 121.5 standa rd cubic feet of natural

gas. Good engineering judgment has the meaning given in § 106 8.30 of this chapter. See § 1068.5 of this chapter for the ad ministrative process we use to evaluate good engineering judgment. Gross vehicle weight rating means the manufacturer's gr oss weight rating for the individual vehicle.
Hatchback means a passenger automobile where th e conventional luggage compartment,

i.e. , trunk, is replaced by a cargo area which is open to the passenger compartment and accessed vertically by a rear door wh ich encompasses the rear window. Highway fuel economy means the highway fuel economy determined either by operating a vehicle (or vehicles) over the driving schedule in the Federal highway fuel economy test procedure, or determined according to either the vehicle-specific 5-cycle equation or the derived 5-cycle equation for highway fuel economy. Highway fuel economy test procedure (HFET) refers to the dynamometer driving schedule, dynamometer procedure, and sampli ng and analytical procedures described in subpart B of this part and which are us ed to derive highway fuel economy data. HFET-based fuel economy means the highway fuel economy determined in § 600.113 of this part, on the basis of HFET testing. Hybrid electric vehicle (HEV) has the meaning given in § 86.1803 of this chapter. Independent Commercial Importer has the meaning given in § 85.1502 of this chapter.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 184 of 339 Inertia weight class means the class, which is a group of test weights, into which a vehicle is grouped based on its loaded vehicl e weight in accordance with the provisions of part 86 of this chapter.
Label means a sticker that contains fuel ec onomy information and is affixed to new automobiles in accordance with subpart D of this part. Light truck means an automobile that is not a pa ssenger automobile, as defined by theSecretary of Transportation at 49 CFR 523.5. This term is interchangeable with “nonpassenger automobile.” The term the “light truck” includes medium-duty passenger vehicles which are manufactured during 2011 and later model years. Medium-duty passenger vehicle means a vehicle which would sa tisfy the criteria for light trucks as defined by the Secretary of Tr ansportation at 49 CFR 523.5 but for its gross vehicle weight rating or its cu rb weight, which is rated at more than 8,500 lbs GVWR or has a vehicle curb weight of more than 6,000 pounds or has a basic vehicle frontal area in excess of 45 square feet, and which is desi gned primarily to transport passengers, but does not include a vehicle that: (1) Is an “incomplete truck” as defined in this subpart; or (2) Has a seating capacity of more than 12 persons; or (3) Is designed for more than 9 persons in seating rearward of the driver's seat; or (4) Is equipped with an open cargo area (for example, a pick-up truck box or bed) of 72.0 inches in interior length or more. A covered box not readily accessible from the passenger compartment will be considered an open cargo area for purposes of this definition.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 185 of 339 Minivan means a light truck which is designed pr imarily to carry no more than eight passengers, having an integral enclosure fully enclosing the driver, passenger, and loadcarrying compartments, and rear seats readily removed, folded, stow ed, or pivoted to facilitate cargo carrying. A mi nivan typically includes one or more sliding doors and a rear liftgate. Minivans typically have less tota l interior volume or overall height than full sized vans and are commonly advertis ed and marketed as “minivans.” Model year means the manufacturer's annual pro duction period (as determined by the Administrator) which includes January 1 of su ch calendar year. If a manufacturer has no annual production period, the term “m odel year” means the calendar year. Model type means a unique combination of car line, basic engine, and transmission class.
Motor controller means an electronic or electro-mechanical device to convert energy stored in an energy storage device into a fo rm suitable to power the traction motor. Natural gas-fueled automobile means an automobile designed to operate exclusively on natural gas. Natural gas dual fuel automobile means an automobile: (1) Which is designed to operate on natu ral gas and on gasoline or diesel fuel; (2) Which provides equal or greater energy e fficiency as calculat ed in § 600.510-08(g)(1) while operating on natural gas as it does while operating on gasoline or diesel fuel; and (3) Which, in the case of passenger automobiles, meets or exceeds the minimum driving range established by the Department of Transportation in 49 CFR part 538. Non-passenger automobile has the meaning given by the Department of Transportation at 49 CFR 523.5. This term is synonymous with “light truck.”Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 186 of 339 Passenger automobile has the meaning given by the Depa rtment of Transportation at 49
CFR 523.4. Pickup truck means a nonpassenger automobile which has a passenger compartment and an open cargo bed. Plug-in hybrid electric vehicle (PHEV) has the meaning given in § 86.1803 of this chapter.
Production volume means, for a domestic manufacturer , the number of vehicle units domestically produced in a pa rticular model year but not exported, and for a foreign manufacturer, means the number of vehicle uni ts of a particular model imported into the United States. QR Code means Quick Response Code, which is a registered trademark of Denso Wave, Incorporated.
Round has the meaning given in 40 CFR 1065.1001, unless specified otherwise.
SC03 means the test procedure specified in § 86.160 of this chapter. Secretary of Transportation means the Secretary of Trans portation or his authorized representative. Secretary of Energy means the Secretary of Energy or his authorized representative. Sport utility vehicle (SUV) means a light truck with an extended roof line to increase cargo or passenger capacity, cargo compartm ent open to the passenger compartment, and one or more rear seats readily removed or folded to facil itate cargo carrying. Station wagon means a passenger automobile with an extended roof line to increase cargo or passenger capacity, cargo compartment open to the passenger compartment, a tailgate, and one or more rear seats readily removed or folded to facilitate cargo carrying.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 187 of 339 Subconfiguration means a unique combination within a vehicle configuration of equivalent test weight, road-load horsepower , and any other operationa l characteristics or parameters which the Administrator determ ines may significantly affect fuel economy within a vehicle configuration.
Track width has the meaning given in § 86.1803 of this chapter.
Transmission class means a group of transmissions having the following common features: Basic transmission type (manual, automatic, or semi-automatic); number of forward gears used in fuel economy test ing (e.g., manual four-speed, three-speed automatic, two-speed semi-automatic); drive system (e.g., front wheel drive, rear wheel drive; four wheel drive), type of overdrive, if app licable (e.g., final gear ratio less than 1.00, separate overdrive unit); torque converter type, if applicable (e.g., non-lockup, lockup, variable ratio); and othe r transmission characteristics that may be determined to be significant by the Administrator. Transmission configuration means the Administrator may further subdivide within a transmission class if the Administrator determines that sufficient fuel economy differences exist. Features such as gear ra tios, torque converter multiplication ratio, stall speed, shift calibration, or shift speed may be used to furthe r distinguish characteristics within a transmission class. Test weight means the weight within an inertia weight class which is used in the dynamometer testing of a vehicle, and which is based on its loaded vehicle weight in accordance with the provisions of part 86 of this chapter.
Ultimate consumer means the first person who purchases an automobile for purposes other than resale or leases an automobile.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 188 of 339 US06 means the test procedure as desc ribed in § 86.159 of this chapter. US06-City means the combined periods of the US06 test that occur before and after the US06-Highway period. US06-Highway means the period of the US06 test that begins at the end of the deceleration which is scheduled to occur at 130 seconds of the driving schedule and terminates at the end of the deceleration whic h is scheduled to occur at 495 seconds of the driving schedule.

Van means any light truck having an integral enclosure fully enclosing the driver compartment and load carrying compartment. The distance from the leading edge of the windshield to the foremost body section of vans is typically shorter than that of pickup trucks and SUVs. Vehicle configuration means a unique combination of basic engine, engine code, inertia weight class, transmission configurati on, and axle ratio within a base level. Vehicle-specific 5-cycle fuel economy means the fuel economy calculated according to the procedures in § 600.114.
Wheelbase has the meaning given in § 86.1803 of this chapter.

17. The redesignated § 600.003 is re vised to read as follows: § 600.003 Abbreviations. The abbreviations and acronym s used in this pa rt have the same meaning as those in part 86 of this chapter, with th e addition of the following:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 189 of 339 (a) “MPG” or “mpg” means miles per gallon. This may be used to generally describe fuel economy as a quantity, or it may be used as the units associated with a particular value. (b) MPGe means miles per gallon equivalent. This is generally used to quantify a fuel economy value for vehicles that use a fuel ot her than gasoline. The value represents miles the vehicle can drive with the energy equivalent of one gallon of gasoline. (c) SCF means standard cubic feet. (d) SUV means sport utility vehicle. (e) CREE means carbon-rela ted exhaust emissions.

18. The redesignated § 600.005 is amended by revising the introductory text and paragraph (a) to read as follows: § 600.005 Maintenanc e of records and rights of entry. The provisions of this section are applicab le to all fuel economy data vehicles. Certification vehicles are required to meet the provisions of § 86.1844 of this chapter. (a) The manufacturer of any new motor vehi cle subject to any of the standards or procedures prescribed in this part shall establish, maintain, and retain the following adequately organized and indexed records: (1) General records. (i) Identification and description of all vehicles for which data are submitted to meet the requirements of this part. (ii) A description of all procedur es used to test each vehicle. (iii) A copy of the information required to be submitted under § 600.006 fulfills the requirements of paragraph (a )(1)(i) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 190 of 339 (2) Individual records. (i) A brief history of each vehicle for which data are submitted to meet the requirements of this part, in the fo rm of a separate booklet or other document for each separate vehicles, in which must be recorded: (A) The steps taken to ensure th at the vehicle with respect to its engine, drive train, fuel system, emission control system components, exhaust after treatm ent device, vehicle weight, or any other device or component, as applicable, will be representative of production vehicles. In the case of electric vehicles, the manuf acturer should describe the steps taken to ensure that the vehicle with respect to its electric traction motor, motor controller, battery conf iguration, or any other device or co mponent, as applicable, will be representative of production vehicles. (B) A complete record of all emission tests performed under part 86 of this chapter, all fuel economy tests performed under this pa rt 600 (except tests actually performed by EPA personnel), and all electric vehicle te sts performed according to procedures promulgated by DOE, including all individua l worksheets and other documentation relating to each such test or exact copies thereof; the date , time, purpose, and location of each test; the number of miles accumulated on the vehicle when the tests began and ended; and the names of supervisory personnel responsible for the c onduct of the tests. (C) A description of mileage accumulated sin ce selection of buildup of such vehicles including the date and time of each m ileage accumulation listing both the mileage accumulated and the name of each driver, or each operator of th e automatic mileage accumulation device, if applicable. Additiona lly, a description of mileage accumulated prior to selection or buildup of such vehicle must be maintained in such detail as is available.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 191 of 339 (D) If used, the record of a ny devices employed to record th e speed or mileage, or both, of the test vehicle in relationship to time. (E) A record and description of all mainte nance and other servic ing performed, within 2,000 miles prior to fuel economy testing under th is part, giving the date and time of the maintenance or service, the reason for it, the person authorizing it, and the names of supervisory personnel responsible for the condu ct of the maintenance or service. A copy of the maintenance information to be submitted under § 600.006 fulfills the requirements of this paragraph (a)(2)(i)(E). (F) A brief description of any significant ev ents affecting the vehi cle during any of the period covered by the history not described in an entry under one of the previous headings including such extraordinary events as vehicle accidents or driver speeding citations or warnings. (3) The manufacturer shall retain all records required under this part fo r five years after the end of the model year to which they rela te. Records may be retained as hard copy or some alternative storage medium, provided that in every case all the information contained in hard copy shall be retained.
* * * * *

19. The redesignated § 600.006 is amended by revi sing paragraphs (c), (e), and (g) to read as follows: § 600.006 Data and information requiremen ts for fuel economy data vehicles.
* * * * * (c) The manufacturer shall submit the following fuel economy data:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 192 of 339 (1) For vehicles tested to meet the requireme nts of part 86 of this chapter (other than those chosen in accordance with the provision s related to durability demonstration in § 86.1829 of this chapter or in-use verificati on testing in § 86.1845 of this chapter), the FTP, highway, US06, SC03 and cold temperature FTP fuel economy results, as applicable, from all tests on that vehicle, and the test results adjusted in accordance with paragraph (g) of this section. (2) For each fuel economy data vehicle, all individual test results (excluding results of invalid and zero mile tests) a nd these test results adjusted in accordance with paragraph (g) of this section. (3) For diesel vehicles tested to meet the re quirements of part 86 of this chapter, data from a cold temperature FTP, performe d in accordance with § 600.111–08(e), using the fuel specified in § 600.107–08(c). (4) For all vehicles tested in paragraph (c )(1) through (3) of this section, the individual fuel economy results measured on a per-phase ba sis, that is, the individual phase results for all sample phases of the FTP, cold temperature FTP and US06 tests. (5) Starting with the 2012 model year, the data submitted according to paragraphs (c)(1) through (4) of this section shall includ e total HC, CO, CO 2 , and, where applicable for alternative fuel vehicles, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC and CH 4 . Manufacturers incorporating N 2 O and CH 4 emissions in their fleet average carbon-related exhaust emissions as allowed under § 86.1818 of this chapter shall also submit N 2 O and
CH 4 emission data where applicable. The fuel economy and CO 2 emission test results shall be adjusted in accordance with paragraph (g) of this section.
* * * * *Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 193 of 339 (e) In lieu of submitting actual data from a te st vehicle, a manufacturer may provide fuel economy, CO 2 emissions, and carbon-related exhaus t emission values derived from a previously tested vehicle, where the fuel economy, CO 2 emissions, and carbon-related exhaust emissions are expected to be equiva lent (or less fuel-efficient and with higher
CO 2 emissions and carbon-related exhaust emi ssions). Additionally, in lieu of submitting actual data from a test vehicle, a ma nufacturer may provide fuel economy, CO 2 emissions, and carbon-related exhaust emissi on values derived from an analytical expression, e.g., regression analysis . In order for fuel economy, CO 2 emissions, and carbon-related exhaust emission values derive d from analytical methods to be accepted, the expression (form and coefficients) must have been approved by the Administrator.
* * * * * (g)(1) The manufacturer shall ad just all test data used for fuel economy label calculations in subpart D and average fuel economy calcu lations in subpart F for the classes of automobiles within the categor ies identified in paragraphs of § 600.510(a)(1) through (4). The test data shall be adjusted in accordance with paragraph (g)(3) or (4) of this section as applicable. (2) [Reserved] (3)(i) The manufacturer shall adjust all fuel economy test data gene rated by vehicles with engine-drive system combinations with more than 6,200 miles by using the following equation:

FE 4,000mi = FE T [0.979 + 5.25×10 − 6 (mi)] − 1

Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 194 of 339 FE 4,000mi = Fuel economy data adjusted to 4,000-mile test point rounded to the nearest 0.1

mpg. FE T = Tested fuel economy value rounded to the nearest 0.1 mpg. mi = System miles accumulated at the start of the test rounded to the nearest whole mile. (ii)(A) The manufacturer shall adjust all CO 2 test data generated by ve hicles with engine-drive system combinations with more than 6,200 miles by using the following equation:
CO2 4,000mi = CO2 T [0.979 + 5.25·10 − 6 · (mi)] Where:
CO2 4,000mi = CO 2 emission data adjusted to 4,000-mile test point.
CO2 T = Tested emissions value of CO 2 in grams per mile. mi = System miles accumulated at the start of the test rounded to the nearest whole mile. (B) Emissions test values and results used and determined in the calculations in this paragraph (g)(3)(ii) shall be rounded in acco rdance with § 86.1837 of this chapter as applicable. CO 2 and CREE values shall be rounded to the nearest gram per mile. (4) For vehicles with 6,200 miles or less accumu lated, the manufacturer is not required to adjust the data.

20. The redesignated § 600.007 is amended by revi sing paragraphs (a), (b), and (e) to read as follows: § 600.007 Vehicle acceptability.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 195 of 339 (a) All certification vehicles a nd other vehicles tested to me et the requirements of part 86 of this chapter (other than those chosen under the durability-demonstration provisions in § 86.1829 of this chapter), are considered to ha ve met the requirements of this section. (b) Any vehicle not meeting the provisions of paragraph (a) of th is section must be judged acceptable by the Administrator under this section in order for the test results to be reviewed for use in subpart C or F of this part. The Administrator will judge the acceptability of a fuel economy data vehicl e on the basis of the information supplied by the manufacturer under § 600.006(b). The criteria to be met are: (1) A fuel economy data vehicle may have accumulated not more than 10,000 miles. A vehicle will be considered to have met this requirement if the engine and drivetrain have accumulated 10,000 or fewer miles. The component s installed for a fuel economy test are not required to be the ones with whic h the mileage was accumulated, e.g., axles, transmission types, and tire sizes may be changed. The Administrator will determine if vehicle/engine component changes are acceptable. (2) A vehicle may be tested in different ve hicle configurations by change of vehicle components, as specified in paragraph (b)(1) of this section, or by testing in different inertia weight classes. Also, a single vehicle may be tested under different test conditions,

i.e. , test weight and/or road load horsepower, to generate fuel economy data representing various situations with in a vehicle configuration. For purpos es of this part, data generated by a single vehicle tested in various test conditions will be treated as if the data were generated by the testing of multiple vehicles. (3) The mileage on a fuel economy data vehi cle must be, to the extent possible, accumulated according to § 86.1831 of this chapter.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 196 of 339 (4) Each fuel economy data vehicle must meet the same exhaust emission standards as certification vehicles of the respective engi ne-system combination during the test in which the city fuel economy test results ar e generated. This may be demonstrated using one of the following methods: (i) The deterioration factors established for the respective engine-system combination per § 86.1841 of this chapter as applicable will be used; or (ii) The fuel economy data vehicle will be equipped with aged emission control components according to the provisions of § 86.1823 of this chapter. (5) The calibration information submitted unde r § 600.006(b) must be representative of the vehicle configuration for which the fuel economy and carbon-related exhaust emissions data were submitted. (6) Any vehicle tested for fuel economy or carbon-related exhaust emissions purposes must be representative of a vehicle which the manufacturer intends to produce under the provisions of a certific ate of conformity. (7) For vehicles imported under § 85.1509 or § 85.1511( b)(2), (b)(4), (c)(2) , (c)(4) of this chapter, or (e)(2) (when a pplicable) only the following requirements must be met: (i) For vehicles imported under § 85.1509 of this chapter, a highway fuel economy value must be generated contemporaneously with the emission tests used for purposes of demonstrating compliance with § 85.1509 of this chapter. No modifications or adjustments should be made to the vehicles between the highway fuel economy, FTP, US06, SC03 and Cold temperature FTP tests.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 197 of 339 (ii) For vehicles imported under § 85.1509 or § 85.1511(b)(2), (b)(4), (c )(2), or (c)(4) of this chapter (when applicab le) with over 10,000 miles, th e equation in § 600.006(g)(3) shall be used as though only 10,000 miles had been accumulated. (iii) Any required fuel economy testing must take place after any safety modifications are completed for each vehicle as required by regulations of the Department of Transportation. (iv) Every vehicle imported under § 85.1509 or § 85.1511(b)(2), (b)(4), (c)(2), or (c)(4) of this chapter (when applicable) must be c onsidered a separate type for the purposes of calculating a fuel economy label for a manufacturer's average fuel economy.
* * * * * (e) If, based on a review of the emission data for a fuel economy data vehicle, submitted under § 600.006(b), or emission data genera ted by a vehicle tested under § 600.008(e), the Administrator finds an indication of non-compliance with sect ion 202 of the Clean Air Act, 42 U.S.C. 1857 et seq. of the re gulation thereunder, he may take such investigative actions as are appropriate to determine to what extent emission noncompliance actually exists. (1) The Administrator may, under the provision s of § 86.1830 of this chapter, request the manufacturer to submit production vehicles of the configuration(s) specified by the Administrator for testing to determine to what extent emission noncompliance of a production vehicle configurati on or of a group of production vehicle configurations may actually exist. (2) If the Administrator dete rmines, as a result of his i nvestigation, that substantial emission non-compliance is exhibited by a produ ction vehicle confi guration or group ofFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 198 of 339 production vehicle configurations, he may proceed with respect to the vehicle configuration(s) as provided under § 600.206-08(b), § 600.206-12(b), § 600.207-08(c), or § 600.207-12(c) as applicable of th e Clean Air Act, 42 U.S.C. 1857 et seq. * * * * *

21. The redesignated § 600.008 is amended by revising the section heading and paragraphs (a)(1) and (a)(2) (i) to read as follows: § 600.008 Review of fu el economy, CO 2 emissions, and carbon

‐ related exhaust

emission data, testing by the Administrator. (a) * * * (1)(i) The Administrator may require that a ny one or more of the test vehicles be submitted to the Agency, at such place or places as the Agency may designate, for the purposes of conducting fuel economy tests. Th e Administrator may specify that such testing be conducted at the manufacturer's facility, in which case instrumentation and equipment specified by the Administrator shall be made available by the manufacturer for test operations. The tests to be performed may comprise the FTP, highway fuel economy test, US06, SC03, or Cold temperature FTP or any combination of those tests. Any testing conducted at a manufacturer's facili ty pursuant to this paragraph shall be scheduled by the manufacturer as promptly as possible. (ii) Starting with the 2012 model year, evaluatio ns, testing, and test da ta described in this section pertaining to fuel economy shall also be performed for CO 2 emissions and carbon-related exhaust emissions, except that CO 2 emissions and carbon-related exhaust emissions shall be arithmetica lly averaged instead of harmoni cally averaged, and in casesFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 199 of 339 where the manufacturer selects the lowest of several fuel economy results to represent the vehicle, the manufactur er shall select the CO 2 emissions and carbon-related exhaust emissions value from the test results associ ated with the lowest selected fuel economy results. (2) * * * (i) The manufacturer's fuel economy data (or harmonically averaged data if more than one test was conducted) will be compared with the results of the Administrator's test.
* * * * *

22. The redesignated § 600.009 is re vised to read as follows: § 600.009 Hearing on acceptance of test data. (a) The m anufacturer may request a heari ng on the Administrator's decision if the Administrator rejects any of the following: (1) The use of a manufacturer's fuel ec onomy data vehicle, in accordance with§ 600.008(e) or (g), or (2) The use of fuel economy data, in accordance with § 600.008(c), or (f), or (3) The determination of a vehicle confi guration, in accordance with § 600.206(a), or (4) The identification of a car line, in accordance with § 600.002(a)(20), or (5) The fuel economy label values dete rmined by the manufacturer under § 600.312(a), then: (b) The request for a hearing must be filed in writing within 30 day after being notified of the Administrator’s decision. The request must be signed by an authorized representativeFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 200 of 339 of the manufacturer and include a statemen t specifying the manufacturer's objections to the Administrator's determinations, w ith data in support of such objection. (c) If, after the review of th e request and supporting data, the Administrator finds that the request raises one or more s ubstantial factual issues, the Administrator shall provide the manufacturer with a hearing in accordan ce with the provisions of 40 CFR part 1068, subpart G. (d) A manufacturer's use of any fuel ec onomy data which the ma nufacturer challenges pursuant to this section shall not constitute final acceptance by the manufacturer nor prejudice the manufacturer in the exercise of any appeal pursua nt to this section challenging such fuel economy data.

23. The redesignated § 600.010 is amended by revi sing paragraphs (a) introductory text, (c), and (d) to read as follows: § 600.010 Vehicle test requireme nts and minimum data requirements. (a) Unless otherwise exempted from specifi c emission compliance requirements, for each certification vehicle defined in this part, and for each vehi cle tested according to the emission test procedures in part 86 of th is chapter for addition of a model after certification or approval of a running change (§ 86.1842 of this chapter, as applicable):
* * * * * (c) Minimum data requirements for labeling. (1 ) In order to establish fuel economy label values under § 600301, the manufacturer shall us e only test data accepted in accordance with § 600.008 meeting the minimum coverage of: (i) Data required for emission certifica tion under §§ 86.1828 and 86.1842 of this chapter.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 201 of 339 (ii)(A) FTP and HFET data from the highest projected model year sales subconfiguration within the highest projected model year sa les configuration for each base level, and (B) If required under § 600.115–08, for 2011 and later model year vehicles, US06, SC03 and cold temperature FTP data from th e highest projected model year sales subconfiguration within the hi ghest projected model year sales configuration for each base level. Manufacturers may optionally ge nerate this data for any 2008 through 2010 model years, and, 2011 and later model year vehicles, if not otherwise required. (iii) For additional model types establ ished under § 600.208-08(a)(2), § 600.208-12(a)(2) § 600.209-08(a)(2), or § 600.209-12(a)(2) FTP an d HFET data, and if required under § 600.115, US06, SC03 and Cold temperature FTP data from each subconfiguration included within the model type. (2) For the purpose of recalculating fuel economy label values as required under § 600.314-08(b), the manufacturer shall s ubmit data required under § 600.507. (d) Minimum data requirements for the manufacturer's average fuel economy and average carbon-related exhaust emissions For the pur pose of calculating the manufacturer's average fuel economy and average carbon -related exhaust emissions under § 600.510, the manufacturer shall submit FTP (city) and HFET (highway) test data representing at least 90 percent of the manufacturer's actual model year production, by configuration, for each category identified for calculation u nder § 600.510–08(a)(1) or § 600.510-12(a)(1).

24. The redesignated § 600.011 is re vised to read as follows: § 600.011 Reference materials.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 202 of 339 (a) Incorporation by reference. The documents referenced in this section have been incorporated by reference in this part. Th e incorporation by refe rence was approved by the Director of the Federal Re gister in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be inspected at the U.S. Envi ronmental Protection Agency, Office of Air and Radiation, 1200 Pennsylvania Ave., NW., Washington, DC 20460, phone (202) 272– 0167, or at the National Archives and Record s Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to: http://www.archives.gov/federal_register/code _of_federal_regulations/ibr_locations.html and is available from th e sources listed below: (b) ASTM. The following material is available fr om the American Society for Testing and Materials. Copies of these materials may be obtained from American Society for Testing and Materials, ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA, 19428-2959, phone 610-832-9585 . http://www.astm.org/

. (1) [Reserved] (2) ASTM D 1298–99 (Reapproved 2005) Standa rd Practice for Density, Relative Density (Specific Gravity), or API Gravit y of Crude Petroleum and Liquid Petroleum Products by Hydrometer Method, IBR approved for §§ 600.113–08, 600.510–08, and
600.510-12. (3) ASTM D 3343–05 Standard Test Method fo r Estimation of Hydrogen Content of Aviation Fuels, IBR approved for § 600.113–08. (4) ASTM D 3338–09 Standard Test Method for Estimation of Net Heat of Combustion of Aviation Fuels, IBR approved for § 600.113–08.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 203 of 339 (5) ASTM D 240–09 Standard Test Method for Heat of Combustion of Liquid Hydrocarbon Fuels by Bomb Calori meter, IBR approved for §§ 600.113–08, and
600.510–08. (6) ASTM D975–10 Standard Specification fo r Diesel Fuel Oils, IBR approved for §
600.107–08. (7) ASTM D 1945–03 (Reapproved 2010) Standard Test Method for Analysis of Natural Gas By Gas Chromatography, IBR approved for §600.113–08. (c) SAE Material. The following material is availabl e from the Society of Automotive Engineers. Copies of these materials ma y be obtained from Society of Automotive Engineers World Headquarters, 400 Commonwealth Dr., Wa rrendale, PA 15096–0001, phone (877) 606–7323 (U.S. and Canada) or (724) 776–4970 (outside the U.S. and Canada), or at http://www.sae.org. (1) Motor Vehicle Dimensions—Recommende d Practice SAE 1100a (Report of Human Factors Engineering Committee, Society of Automotive Engineers, approved September 1973 as revised September 1975), IBR approved for § 600.315-08. (2) SAE J1634, Electric Vehicle Energy Cons umption and Range Test Procedure, October 2002, IBR approved for §§ 600.116–12 and 600.311-12. (3) SAE J1711, Recommended Practice for Meas uring the Exhaust Emissions and Fuel Economy of Hybrid-Electrric Vehicles, Incl uding Plug-In Hybrid Vehicles, June 2010, IBR approved for §§ 600.116–12 and 600.311-12. (d) ISO Material. The following material is available from the International Organization for Standardization. Copies of these materi als may be obtained from the InternationalFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 204 of 339 Organization for Standardization, Case Po stale 56, CH–1211 Geneva 20, Switzerland or http://www.iso.org

. (1) ISO/IEC 18004:2006, “Information technolo gy—Automatic identification and data capture techniques -- QR Code 2005 bar code symbology specification.” (2) [Reserved]

Subpart B— FUEL ECON OMY AND CARBON
‐ RELATED EXHAUST EMISSION TEST

PROCEDURES

25. The heading for subpart B is revised as set forth above. § 600.101
‐ 08, § 600.101
‐ 12, § 600.101
‐ 86, § 600.101
‐ 93, § 600.102
‐ 78, § 600.103
‐ 78, §

600.104
‐ 78, § 600.105
‐ 78, § 600.106
‐ 78, § 600.107
‐ 78, § 600.107
‐ 93, § 600.109
‐ 78, §

600.110
‐ 78, § 600.111
‐ 80, § 600.111
‐ 93, § 600.112
‐ 78, § 600.113
‐ 78, § 600.113
‐ 88, §

600.113
‐ 93—[Removed]

26. Subpart B is am ended by rem oving the following sections: § 600.101-08 § 600.101-12 § 600.101-86 § 600.101-93 § 600.102-78 § 600.103-78 § 600.104-78Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 205 of 339 § 600.105-78 § 600.106-78 § 600.107-78 § 600.107-93 § 600.109-78 § 600.110-78 § 600.111-80 § 600.111-93 § 600.112-78 § 600.113-78 § 600.113-88 § 600.113-93

27. Section § 600.106-08 is revised to read as follows: § 600.106
‐ 08 Equipment requirem ents. The requirements for test equipment to be us ed for all fuel economy testing are given in subparts B and C of part 86 of this chapter.

28. Section § 600.107-08 is revised to read as follows: § 600.107
‐ 08 Fuel specifications. (a) The test fuel specifications for gasolin e, diesel, m ethanol, and methanol-petroleum fuel mixtures are given in § 86.113 of this chapter, except for cold temperature FTP fuelFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 206 of 339 requirements for diesel and alte rnative fuel vehicles, which are given in paragraph (b) of this section. (b)(1) Diesel test fuel used for cold temp erature FTP testing must comprise a wintergrade diesel fuel as specified in AS TM D975–10 (incorporate d by reference in § 600.011). Alternatively, EPA may approve the use of a different diesel fuel, provided that the level of kerosene added shall not exceed 20 percent. (2) The manufacturer may request EPA approval of the use of an alternative fuel for cold temperature FTP testing. (c) Test fuels representing fuel types for which there are no specifi cations provided in § 86.113 of this chapter may be used if a pproved in advance by the Administrator.

29. Redesignate § 600.108-78 as § 600.108-08.

30. Section § 600.109-08 is amended by revising pa ragraph (b)(3) to re ad as follows: § 600.109
‐ 08 EPA driving cycles

. * * * * * (b) * * * (3) A graphic representation of the range of acceptable speed tolerances is found in § 86.115 of this chapter.
* * * * *

31. Section 600.111-08 is revised to read as follows: § 600.111
‐ 08 Test proc edures.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 207 of 339 This section provides test procedures for the FTP, hi ghway, US06, SC03, and the cold temperature FTP tests. Testing shall be perf ormed according to test procedures and other requirements contained in this part 600 and in part 86 of this chapter, including the provisions of part 86, subparts B, C, and S. (a) FTP testing procedures . The test procedures to be followed for conducting the FTP test are those prescribed in §§ 86.127 through 86.138 of this chapter, as applicable, except as provided for in paragr aph (b)(5) of this section. (The evapor ative loss portion of the test procedure may be omitted unless specifically required by the Administrator.) (b) Highway fuel economy testing procedures . (1) The Highway Fuel Economy Dynamometer Procedure (HFET) consists of preconditioning highway driving sequence and a measured highway driving sequence. (2) The HFET is designated to simulate non- metropolitan driving with an average speed of 48.6 mph and a maximum speed of 60 mph. The cycle is 10.2 miles long with 0.2 stop per mile and consists of warmed-up vehi cle operation on a chassis dynamometer through a specified driving cycle. A pr oportional part of the diluted exhaust emission is collected continuously for subsequent analysis of hydrocarbons, carbon monoxide, carbon dioxide using a constant volume (varia ble dilution) sampler. Diesel dilute exhaust is continuously analyzed for hydrocarbons using a heated sample line and analyzer. Methanol and formaldehyde samples are collected and indi vidually analyzed for methanol-fueled vehicles (measurement of methanol and formaldehyde may be omitted for 1993 through 1994 model year methanol-fueled vehicles pr ovided a HFID calibrated on methanol is used for measuring HC plus methanol).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 208 of 339 (3) Except in cases of component malfuncti on or failure, all emission control systems installed on or incorporated in a new mo tor vehicle must be functioning during all procedures in this subpart. The Administra tor may authorize maintenance to correct component malfunction or failure. (4) The provisions of § 86.128 of this chapter apply for vehicle transmission operation during highway fuel economy testing under this subpart. (5) Section 86.129 of this chapte r applies for determination of road load power and test weight for highway fuel economy testing. The te st weight for the tes ting of a certification vehicle will be that test wei ght specified by the Administrato r under the provisions of part 86 of this chapter. The test weight for a fuel economy data vehicle will be that test weight specified by the Administrator from the test weights covered by that vehicle configuration. The Administrator will base his selection of a test weight on the relative projected sales volumes of the various test weights within the ve hicle configuration. (6) The HFET is designed to be performed immediately following the Federal Emission Test Procedure, §§ 86.127 through 86.138 of this chapter. When conditions allow, the tests should be scheduled in this sequence. In the event the test s cannot be scheduled within three hours of the Fede ral Emission Test Procedure (including one hour hot soak evaporative loss test, if applicable) the vehicle should be preconditioned as in paragraph (b)(6)(i) or (ii) of this section, as applicable. (i) If the vehicle has experienced more than three hours of soak (68 °F–86 °F) since the completion of the Federal Emission Test Proced ure, or has experienced periods of storage outdoors, or in environments where soak te mperature is not controlled to 68 °F–86 °F,Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 209 of 339 the vehicle must be preconditioned by ope ration on a dynamometer through one cycle of the EPA Urban Dynamometer Driving Schedule, § 86.115 of this chapter. (ii) EPA may approve a manu facturer’s request for addi tional preconditioning in unusual circumstances (7) Use the following procedure to determine highway fuel economy: (i) The dynamometer procedure consists of two cycl es of the Highway Fuel Economy Driving Schedule (§ 600.109-08(b)) separated by 15 seco nds of idle. The first cycle of the Highway Fuel Economy Driving Schedule is driv en to precondition the test vehicle and the second is driven for the fuel economy measurement. (ii) The provisions of § 86.135of this chapter, except for the overview and the allowance for practice runs, apply for highway fuel economy testing. (iii) Only one exhaust sample and one backgr ound sample are collected and analyzed for hydrocarbons (except diesel hydrocarbons wh ich are analyzed continuously), carbon monoxide, and carbon dioxide. Methanol a nd formaldehyde samples (exhaust and dilution air) are collected and analyzed for methanol-fueled vehicles (measurement ofmethanol and formaldehyde may be omitted for 1993 through 1994 model year methanolfueled vehicles provided a HFID calibrated on methanol is used for measuring HC plus methanol). (iv) The fuel economy measurement cycle of the test includes tw o seconds of idle indexed at the beginning of the second cycle and two seconds of idle indexed at the end of the second cycle. (8) If the engine is not r unning at the initiation of the highway fuel economy test (preconditioning cycle), the start-up procedure must be ac cording to the manufacturer'sFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 210 of 339 recommended procedures. False starts and stalls during the preconditioning cycle must be treated as in § 86.136 of this chapter. If the vehicle stalls during the measurement cycle of the highway fuel economy test, the te st is voided, corrective action may be taken according to § 86.1834 of this chapter, and the vehicle may be rescheduled for testing. The person taking the corrective ac tion shall report the action so that the test records for the vehicle contain a re cord of the action. (9) The following steps must be taken for each test: (i) Place the drive wheels of the vehicle on the dynamometer. The vehicle may be driven onto the dynamometer. (ii) Open the vehicle engine compartment c over and position the cooling fan(s) required. Manufacturers may request the use of additional cooling fans or variable speed fan(s) for additional engine compartment or under-vehicle cooling and for controlling high tire or brake temperatures during dynamometer operation. With pr ior EPA approval, manufacturers may perform the test with the engine compartment closed, e.g. to provide adequate air flow to an intercooler (thr ough a factory installed hood scoop). Additionally, the Administrator may conduct fuel economy te sting using the additional cooling set-up approved for a specific vehicle. (iii) Preparation of the CVS must be perfor med before the measurement highway driving cycle. (iv) Equipment preparation. The provisions of § 86.137-94(b)(3) th rough (6) of this chapter apply for highway fuel economy te st, except that only one exhaust sample collection bag and one dilution air sample co llection bag need to be connected to the sample collection systems.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 211 of 339 (v) Operate the vehicle over one Highwa y Fuel Economy Driving Schedule cycle according to the dynamometer driving schedule specified in § 600.109-08(b). (vi) When the vehicle reaches zero speed at the end of the preconditioning cycle, the driver has 17 seconds to prepare for the emission measurement cycle of the test. (vii) Operate the vehicle over one Highway Fuel Economy Driving Schedule cycle according to the dynamometer driving schedule specified in § 600.109-08(b) while sampling the exhaust gas. (viii) Sampling must begin two seconds before beginning the first accel eration of the fuel economy measurement cycle and must end two seconds after the end of the deceleration to zero. At the end of the deceleration to zero speed, the roll or shaft revolutions must be recorded. (10) For alcohol-based dual fuel automobile s, the procedures of § 600.111-08(a) and (b) shall be performed for each of the fuels on which the vehicle is designed to operate. (c) US06 Testing procedures. The test procedures to be followed for conducting the US06 test are those prescribed in § 86.159 of this chapter, as applicable. (d) SC03 testing procedures. The test procedures to be followed for conducting the SC03 test are prescribed in §§ 86.160 and 161 of this chapter, as applicable. (e) Cold temperature FTP procedures. The test procedures to be followed for conducting the cold temperature FTP test are generally pr escribed in subpart C of part 86 of this chapter, as applicable. For the purpose of fuel economy labeling, diesel vehicles are subject to cold temperature FTP testing, but are not required to measure particulate matter, as described in § 86.210 of this chapter.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 212 of 339 (f) Special Test Procedures . The Administrator may prescrib e test procedures, other than those set forth in this subpart B, for any ve hicle which is not sus ceptible to satisfactory testing and/or testing results by the procedures set forth in this part. For example, special test procedures may be used for advanced technology vehicles, incl uding, but not limited to fuel cell vehicles, hybrid electric vehicles using hydraulic energy storage, and vehicles equipped with hydrogen internal combustion engines. Additionally, the Administrator may conduct fuel economy and carbon-related exhaust emission testi ng using the special test procedures approved for a specific vehicle.

32. Section 600.113-12 is revised to read as follows: § 600.113
‐ 12 Fuel ec onomy, CO 2 emissions, and carbon

‐ related exhaust emission

calculations for FTP, HFET, US06, SC03 and cold temperature FTP tests. The Administrator will use the calculation procedure set forth in this paragraph for all official EPA testing of vehicles fueled with gasoline, diesel, alcohol-based or natural gas fuel. The calculations of the weighted fuel economy and carbon-related exhaust emission values require input of the weighted gram s/mile values for total hydrocarbons (HC), carbon monoxide (CO), and carbon dioxide (CO 2 ); and, additionally for methanol-fueled automobiles, methanol (CH 3 OH) and formaldehyde (HCHO); and, additionally for ethanol-fueled automobiles, methanol (CH 3 OH), ethanol (C 2 H 5 OH), acetaldehyde (C 2 H 4 O), and formaldehyde (HCHO); and additiona lly for natural gas-fueled vehicles, non-methane hydrocarbons (NMHC) and methane (CH 4 ). For manufacturers selecting the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter the calculations of the carbon-rela ted exhaust emissions require the input of grams/mileFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 213 of 339 values for nitrous oxide (N 2 O) and methane (CH 4 ). Emissions shall be determined for the FTP, HFET, US06, SC03 and cold temperatur e FTP tests. Additionally, the specific gravity, carbon weight fraction a nd net heating value of the test fuel must be determined. The FTP, HFET, US06, SC03 and cold te mperature FTP fuel economy and carbonrelated exhaust emission values shall be cal culated as specified in this section. An example fuel economy calculation app ears in Appendix II of this part. (a) Calculate the FTP fuel economy as follows: (1) Calculate the weighted grams/mile values for the FTP test for CO 2 , HC, and CO, and where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and CH 4 as specified in § 86.144-94(b) of this chapter. Measure a nd record the test fuel's properties as specified in paragraph (f) of this section. (2) Calculate separately the grams/mile values for the cold transient phase, stabilized phase and hot transient phase of the FTP test. For vehicles with more than one source of propulsion energy, one of which is a rechargeable energy storage system, or vehicles with special features that the Administrator de termines may have a rechargeable energy source, whose charge can vary during the test, calculate separately the grams/mile values for the cold transient phase, stabilized phase , hot transient phase and hot stabilized phase of the FTP test. (b) Calculate the HFET fuel economy as follows: (1) Calculate the mass values for the highway fuel economy test for HC, CO and CO 2 , and where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and CH 4 as specified in § 86.144-94(b) of this chapter. Me asure and record the test fuel's properties as specified in paragrap h (f) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 214 of 339 (2) Calculate the grams/mile values for the highway fuel economy test for HC, CO and
CO 2 , and where applicable CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and CH 4 by dividing the mass values obtained in paragr aph (b)(1) of this section, by the actual driving distance, measured in miles, as specified in § 86.135 of this chapter. (c) Calculate the cold temperature FTP fuel economy as follows: (1) Calculate the weighted grams/mile values for the cold temperature FTP test for HC, CO and CO 2 , and where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and
CH 4 as specified in § 86.144-94(b) of this chapter. For 2008 through 2010 diesel-fueled vehicles, HC measur ement is optional. (2) Calculate separately the grams/mile values for the cold transient phase, stabilized phase and hot transient phase of the cold temperature FTP test in § 86.244 of this chapter. (3) Measure and record the test fuel's propert ies as specified in paragraph (f) of this section. (d) Calculate the US06 fuel economy as follows: (1) Calculate the total grams/mile values for the US06 test for HC, CO and CO 2 , and where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and CH 4 as specified in § 86.144-94(b) of this chapter. (2) Calculate separately the grams/mile values for HC, CO and CO 2 , and where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and CH 4 , for both the US06 City phase and the US06 Highway phase of th e US06 test as specifi ed in § 86.164 of this chapter. In lieu of directly measuring the emissions of the separate city and highway phases of the US06 test according to the pr ovisions of § 86.159 of this chapter, the manufacturer may, with the advance appr oval of the Administrator and using goodFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 215 of 339 engineering judgment, optionally analytically determine the grams/mile values for the city and highway phases of the US06 test. To analytically determine US06 City and US06 Highway phase emission results, the ma nufacturer shall multiply the US06 total grams/mile values determined in paragra ph (d)(1) of this sect ion by the estimated proportion of fuel use for the city and highway phases relative to the total US06 fuel use. The manufacturer may estimate the proportion of fuel use for the US06 City and US06 Highway phases by using modal CO 2 , HC, and CO emissions data, or by using appropriate OBD data (e.g., fuel flow rate in grams of fuel per second), or another method approved by the Administrator. (3) Measure and record the test fuel's propert ies as specified in paragraph (f) of this section. (e) Calculate the SC03 fuel economy as follows: (1) Calculate the grams/mile values for the SC03 test for HC, CO and CO 2 , and where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O and CH 4 as specified in § 86.144-94(b) of this chapter. (2) Measure and record the test fuel's propert ies as specified in paragraph (f) of this section. (f) Analyze and determine fuel properties as follows: (1) Gasoline test fuel properties shall be de termined by analysis of a fuel sample taken from the fuel supply. A sample shall be taken after each addition of fresh fuel to the fuel supply. Additionally, the fuel shall be resampled once a month to account for any fuel property changes during storage. Less fre quent resampling may be permitted if EPA concludes, on the basis of ma nufacturer-supplied data, that th e properties of test fuel inFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 216 of 339 the manufacturer's storage facility will remain stable for a period longer than one month. The fuel samples shall be an alyzed to determine the fo llowing fuel properties: (i) Specific gravity measured using ASTM D 1298–99 (incorporatedby reference in § 600.011). (ii) Carbon weight fraction measured using ASTM D 3343–05 (incorporated by reference in § 600.011). (iii) Net heating value (Btu /lb) determined using ASTM D 3338–09 (incorporated by reference in § 600.011). (2) Methanol test fuel shall be analyzed to determine the following fuel properties: (i) Specific gravity using either ASTM D 1298–99 (incorporated by reference in § 600.011) for the blend, or ASTM D 1298–99 (inc orporated by reference at § 600.011) for the gasoline fuel component and also for the methanol fuel component and combining as follows. SG = SGg × volume fraction gasoline + SGm × volume fraction methanol. (ii)(A) Carbon weight fraction using the following equation: CWF = CWFg × MFg+ 0.375 × MFm Where: CWFg= Carbon weight fraction of gasoline po rtion of blend meas ured using ASTM D 3343–05 (incorporated by reference in § 600.011). MFg=Mass fraction gasoline=(G × SGg)/(G × SGg + M × SGm) MFm=Mass fraction methanol=(M × SGm)/(G × SGg + M × SGm) Where: G=Volume fraction gasoline.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 217 of 339 M=Volume fraction methanol. SGg=Specific gravity of gasoline as meas ured using ASTM D 1298–99 (incorporated by reference in § 600.011). SGm=Specific gravity of methanol as m easured using ASTM D 1298–99 (incorporated by reference in § 600.011). (B) Upon the approval of the Administrator, other procedures to measure the carbon weight fraction of the fuel blend may be us ed if the manufacturer can show that the procedures are superior to or equally as accurate as those specified in this paragraph (f)(2)(ii). (3) Natural gas test fuel shall be analyzed to determine the following fuel properties: (i) Fuel composition measured using ASTM D 1945–03 (incorporated by reference in § 600.011). (ii) Specific gravity measured as ba sed on fuel composition per ASTM D 1945–03 (incorporated by refe rence in § 600.011). (iii) Carbon weight fraction, based on the carbon contained only in the hydrocarbon constituents of the fuel. This equals the we ight of carbon in the hydrocarbon constituents divided by the total weight of fuel. (iv) Carbon weight fraction of th e fuel, which equals the total weight of carbon in the fuel (i.e , includes carbon containe d in hydrocarbons and in CO 2 ) divided by the total weight of fuel. (4) Ethanol test fuel shall be analyzed to determine the following fuel properties: (i) Specific gravity using either ASTM D 1298–99 (incorporated by reference in § 600.011) for the blend, or ASTM D 1298–99 (inc orporated by reference at § 600.011) forFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 218 of 339 the gasoline fuel component and also for the methanol fuel component and combining as follows: SG = SGg × volume fraction gasoline + SGm × volume fraction ethanol. (ii)(A) Carbon weight fraction using the following equation: CWF = CWFg × MFg+ 0.521 × MFe Where: CWFg= Carbon weight fraction of gasoline po rtion of blend meas ured using ASTM D 3343–05 (incorporated by reference in § 600.011). MFg=Mass fraction gasoline=(G × SGg)/(G × SGg+ E × SGm) MFe=Mass fraction ethanol=(E × SGm)/(G × SGg+ E × SGm) Where: G=Volume fraction gasoline. E=Volume fraction ethanol. SGg=Specific gravity of gasoline as meas ured using ASTM D 1298–99 (incorporated by reference in § 600.011). SGm=Specific gravity of ethanol as meas ured using ASTM D 1298–99 (incorporated by reference in § 600.011). (B) Upon the approval of the Administrator, other procedures to measure the carbon weight fraction of the fuel blend may be us ed if the manufacturer can show that the procedures are superior to or equally as accurate as those specified in this paragraph (f)(4)(ii). (g) Calculate separate FTP, highway, US 06, SC03 and Cold temperature FTP fuel economy and carbon-related exhaust emissions fr om the grams/mile values for total HC,Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 219 of 339 CO, CO 2 and, where applicable, CH 3 OH, C 2 H 5 OH, C 2 H 4 O, HCHO, NMHC, N 2 O, and
CH 4 , and the test fuel's specific gravity, car bon weight fraction, net heating value, and additionally for natural gas, the test fuel's composition. (1) Emission values for fuel economy calculations . The emission values (obtained per paragraph (a) through (e) of this section, as a pplicable) used in the calculations of fuel economy in this section shall be rounded in accordance with § 86.1837 of this chapter. The CO 2 values (obtained per this section, as app licable) used in each calculation of fuel economy in this section shall be ro unded to the nearest gram/mile. (2) Emission values for carbon-rela ted exhaust emission calculations . (i) If the emission values (obtained per paragraph (a) through (e ) of this section, as applicable) were obtained from testing with aged exhaust em ission control components as allowed under § 86.1823 of this chapter, then thes e test values shall be used in the calculations of carbonrelated exhaust emissions in this section. (ii) If the emission values (obtained per pa ragraph (a) through (e) of this section, as applicable) were not obtained from tes ting with aged exhaust emission control components as allowed under § 86.1823 of this ch apter, then these test values shall be adjusted by the appropriate deterioration f actor determined according to § 86.1823 of this chapter before being used in the calculations of carbon-related exhaust emissions in this section. For vehicles within a test group, th e appropriate NMOG dete rioration factor may be used in lieu of the deterioration factors for CH 3 OH, C 2 H 5 OH, and/or C 2 H 4 O emissions. (iii) The emission values determined in paragra ph (g)(2)(i) or (ii) of this section shall be rounded in accordance with § 86.1837 of this chapter. The CO 2 values (obtained per thisFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 220 of 339 section, as applicable) used in each calculation of carbon-re lated exhaust emissions in this section shall be rounde d to the nearest gram/mile. (iv) For manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter, N 2 O and CH 4 emission values for use in the calculation of carbon-related e xhaust emissions in this se ction shall be the values determined according to paragraph (g)(2)(iv )(A), (B), or (C) of this section. (A) The FTP and HFET test values as determ ined for the emission data vehicle according to the provisions of § 86.1835 of this chapter. These values shall apply to all vehicles tested under this section that are included in the test group represented by the emission data vehicle and shall be adjusted by the a ppropriate deterioration factor determinedaccording to § 86.1823 of this chapter before being used in the calculations of carbonrelated exhaust emissions in this section, except that in-use test data shall not be adjusted by a deterioration factor. (B) The FTP and HFET test values as dete rmined according to testing conducted under the provisions of this subpa rt. These values shall be adjusted by the appropriate deterioration factor determined according to § 86.1823 of this chapter before being used in the calculations of carbon-related exhaust em issions in this secti on, except that in-use test data shall not be adjust ed by a deterioration factor. (C) For the 2012 through 2014 model years onl y, manufacturers may use an assigned value of 0.010 g/mi for N 2 O FTP and HFET test values. This value is not required to be adjusted by a deteri oration factor. (3) The specific gravity and the carbon weight fraction (obtained per pa ragraph (f) of this section) shall be recorded using three place s to the right of the decimal point. The netFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 221 of 339 heating value (obtained per paragr aph (f) of this section) shal l be recorded to the nearest whole Btu/lb. (4) For the purpose of determin ing the applicable in-use CO 2 exhaust emission standard under § 86.1818 of this chapter, the combin ed city/highway carbon-related exhaust emission value for a vehicle subconfiguration is calculated by arithmetically averaging the FTP-based city and HFET-based highway carbon-related exhaust emission values, as determined in § 600.113-12(a) and (b) of this section for the subconfiguration, weighted 0.55 and 0.45 respectively, and rounded to th e nearest tenth of a gram per mile. (h)(1) For gasoline-fueled automobiles tested on a test fuel specified in § 86.113 of this chapter, the fuel economy in miles per gall on is to be calculated using the following equation and rounded to the ne arest 0.1 miles per gallon: mpg = (5174 × 10 4 × CWF × SG)/[((CWF × HC) + (0.429 × CO) + (0.273 × CO 2 )) × ((0.6 × SG × NHV) + 5471)] Where: HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragraph (g) of this section. CWF = Carbon weight fraction of test fuel as obtained in paragraph (g) of this section. NHV = Net heating value by mass of test fuel as obtained in paragraph (g) of this section. SG = Specific gravity of test fuel as obt ained in paragraph (g ) of this section. (2)(i) For 2012 and later model year gasoline-fueled automobiles tested on a test fuel specified in § 86.113 of this chapter, the ca rbon-related exhaust emissions in grams perFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 222 of 339 mile is to be calculated using the following equation and rounded to the nearest 1 gram per mile: CREE = (CWF/0.273×HC) + (1.571×CO) + CO 2 Where: CREE means the carbon-related exhaus t emissions as defined in § 600.002. HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragraph (g) of this section. CWF = Carbon weight fraction of test fuel as obtained in paragraph (g) of this section. (ii) For manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter, the carbon-related exhaust emissions in grams per mile for 2012 and later model year gasoline -fueled automobiles te sted on a test fuel specified in § 86.113 of this chapter is to be calculated using the following equation and rounded to the nearest 1 gram per mile: CREE = [(CWF/0.273)×NMHC] + (1.571×CO) + CO 2 + (298×N 2 O) + (25×CH 4 ) Where: CREE means the carbon-related exhaust emissions as defined in § 600.002-08. NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragraph (g) of this section.

N 2 O= Grams/mile N 2 O as obtained in paragraph (g) of this section.
CH 4 = Grams/mile CH 4 as obtained in paragra ph (g) of this section. CWF = Carbon weight fraction of test fuel as obtained in paragraph (g) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 223 of 339 (i)(1) For diesel-fueled automobiles, calcula te the fuel economy in miles per gallon of diesel fuel by dividing 2778 by the sum of three terms and rounding the quotient to the nearest 0.1 mile per gallon: (i)(A) 0.866 multiplied by HC (in grams/mile s as obtained in paragraph (g) of this section), or (B) Zero, in the case of cold FTP diesel tests for which HC was not collected, as permitted in § 600.113–08(c); (ii) 0.429 multiplied by CO (in grams/mile as obt ained in paragraph (g) of this section); and (iii) 0.273 multiplied by CO 2 (in grams/mile as obtained in paragraph (g) of this section). (2)(i) For 2012 and later model year diesel-fueled automobiles, the carbon-related exhaust emissions in grams per mile is to be calculated using the following equation and rounded to the nearest 1 gram per mile: CREE = (3.172×HC) + (1.571×CO) + CO 2 Where: CREE means the carbon-related exhaust emissions as defined in § 600.002-08. HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragraph (g) of this section. (ii) For manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter, the carbon-related exhaust emissions in grams per mile for 2012 and later model year diesel-f ueled automobiles is to be calculated using the following equation and rounded to the nearest 1 gram per mile:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 224 of 339 CREE = (3.172×NMHC) + (1.571×CO) + CO 2 + (298×N 2 O) + (25×CH 4 ) Where: CREE means the carbon-related exhaust emissions as defined in § 600.002-08. NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragra ph (g) of this section.

N 2 O= Grams/mile N 2 O as obtained in paragraph (g) of this section.
CH 4 = Grams/mile CH 4 as obtained in paragra ph (g) of this section. (j)(1) For methanol-fueled automobiles and automobiles designed to operate on mixtures of gasoline and methanol, the fu el economy in miles per gallon is to be calculated using the following equation: mpg = (CWF×SG×3781.8)/((CWF exHC ×HC) + (0.429×CO) + (0.273×CO 2 ) + (0.375×CH 3 OH) + (0.400×HCHO)) Where: CWF = Carbon weight fraction of the fuel as de termined in paragraph (f)(2)(ii) of this section. SG = Specific gravity of the fuel as determin ed in paragraph (f)(2)(i ) of this section.
CWF exHC = Carbon weight fraction of exhaust hydrocarbons = CWF as determined in paragraph (f)(2)(ii) of this section (for M100 fuel, CWF exHC = 0.866). HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO2 as obtained in paragraph (g) of this section.
CH 3 OH = Grams/mile CH 3 OH (methanol) as obtained in pa ragraph (d) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 225 of 339 HCHO = Grams/mile HCHO (formaldehyde) as obt ained in paragraph (g ) of this section. (2)(i) For 2012 and later m odel year methanol-fueled automobiles and automobiles designed to operate on mixtures of gasolin e and methanol, the carbon-related exhaust emissions in grams per mile is to be calcu lated using the following equation and rounded to the nearest 1 gram per mile: CREE = (CWF exHC /0.273×HC) + (1.571×CO) + (1.374×CH 3 OH) + (1.466×HCHO) +
CO 2 Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.
CWF exHC = Carbon weight fraction of exhaust hydrocarbons = CWF as determined in paragraph (f)(2)(ii) of this section (for M100 fuel, CWF exHC = 0.866). HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragra ph (g) of this section.
CH 3 OH = Grams/mile CH 3 OH (methanol) as obtained in pa ragraph (d) of this section. HCHO = Grams/mile HCHO (formaldehyde) as obt ained in paragraph (g ) of this section. (ii) For manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter, the carbon-related exhaust emissions in grams per mile for 2012 and later model year methanol-fueled automobiles and automobiles designed to operate on mixtures of gasoline an d methanol is to be calculated using the following equation and rounded to the nearest 1 gram per mile: CREE = [(CWF exHC /0.273)×NMHC] + ( 1.571×CO) + (1.374×CH 3 OH) + (1.466×HCHO)
+ CO 2 + (298×N 2 O) + (25×CH 4 )Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 226 of 339 Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.
CWF exHC = Carbon weight fraction of exhaust hydrocarbons = CWF as determined in paragraph (f)(2)(ii) of this section (for M100 fuel, CWF exHC = 0.866). NMHC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO2 as obtained in paragraph (g) of this section.
CH 3 OH = Grams/mile CH 3 OH (methanol) as obtained in pa ragraph (d) of this section. HCHO = Grams/mile HCHO (formaldehyde) as obt ained in paragraph (g ) of this section.

N 2 O = Grams/mile N 2 O as obtained in paragraph (g) of this section.
CH 4 = Grams/mile CH 4 as obtained in paragra ph (g) of this section. (k)(1) For automobiles fueled with natural ga s, the fuel economy in miles per gallon of natural gas is to be calculated using the following equation: 

## ( )( )( ) ( ) ( ) NG NMHC NG NGHC e 

### COCO CO NMHC CWF CH D CWF mpg 22 4 / 

### 273.0 429.0 749.0 5.121 −×+×+× +× × × =

Where:

mpg e =miles per gasoline gallon eq uivalent of natural gas.
CWF HC/NG =carbon weight fraction based on the hydro carbon constituents in the natural gas fuel as obtained in paragraph (g) of this section.

D NG =density of the natural gas fuel [grams/ft 3 at 68 °F (20 °C) and 760 mm Hg (101.3 kPa)] pressure as obtained in pa ragraph (g) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 227 of 339 CH 4 , NMHC, CO, and CO 2 = weighted mass exhaust emissions [grams/mile] for methane, non-methane HC, carbon monoxide, and carbon dioxide as calculated in §
600.113.
CWF NMHC = carbon weight fraction of the non-methan e HC constituents in the fuel as determined from the speciated fuel compos ition per paragraph (f)(3) of this section.
CO 2NG = grams of carbon dioxide in the natural ga s fuel consumed per mile of travel.
CO 2NG = FC NG × D NG × WF CO2 Where: 

### ( )( ) ( ) ( )

NG NG 2 NMHC 4 NG DCWF CO0.273 CO0.429 NMHC CWF CH0.749 FC × × + × + × +× = 

### mileper consumed fuel gas natural offeet cubic = Where:
CWF NG = the carbon weight fraction of the natural gas fuel as calculate d in paragraph (f) of this section.

WF CO2 = weight fraction carbon dioxide of the natu ral gas fuel calculated using the mole fractions and molecular weight s of the natural gas fuel constituents per ASTM D 1945– 03 (incorporated by reference in § 600.011). (2)(i) For automobiles fueled with natural gas, the carbon-related exhaust emissions in grams per mile is to be calculated for 2012 and later model year vehicles using the following equation and rounded to the nearest 1 gram per mile:
CREE = 2.743×CH 4 + CWF NMHC /0.273×NMHC + 1.571×CO + CO 2 Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.
CH 4 = Grams/mile CH 4 as obtained in paragra ph (g) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 228 of 339 NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragraph (g) of this section.
CWF NMHC = carbon weight fraction of the non-methan e HC constituents in the fuel as determined from the speciated fuel compos ition per paragraph (f)(3) of this section. (ii) For manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter, the carbon-related exhaust emissions in grams per mile for 2012 and later model year automobiles fueled with natural gas is to be calculated using the following equation and r ounded to the nearest 1 gram per mile: CREE = (25×CH 4 )+ [(CWF NMHC /0.273)×NMHC] + (1.571×CO) + CO 2 + (298×N 2 O) Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.
CH 4 = Grams/mile CH 4 as obtained in paragra ph (g) of this section. NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragra ph (g) of this section.
CWF NMHC = carbon weight fraction of the non-methan e HC constituents in the fuel as determined from the speciated fuel compos ition per paragraph (f)(3) of this section.

N 2 O = Grams/mile N 2 O as obtained in paragraph (g) of this section. (l)(1) For ethanol-fueled automobiles and automobiles designed to operate on mixtures of gasoline and ethanol, the fuel economy in m iles per gallon is to be calculated using the following equation:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 229 of 339 mpg = (CWF × SG × 3781.8)/((CWF exHC × HC) + (0.429 × CO) + (0.273 × CO 2 ) + (0.375
× CH 3 OH) + (0.400 × HCHO) + (0.521 × C 2 H 5 OH) + (0.545 × C 2 H 4 O)) Where: CWF = Carbon weight fraction of the fuel as determined in paragraph (f)(4) of this section. SG = Specific gravity of the fuel as determ ined in paragraph (f)(4 ) of this section.
CWF exHC = Carbon weight fraction of exhaust hydrocarbons = CWF as determined in paragraph (f)(4) of this section. HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO 2 as obtained in paragra ph (g) of this section.
CH 3 OH = Grams/mile CH 3 OH (methanol) as obtained in pa ragraph (d) of this section. HCHO = Grams/mile HCHO (formaldehyde) as obt ained in paragraph (g ) of this section.
C 2 H 5 OH = Grams/mile C 2 H 5 OH (ethanol) as obtained in pa ragraph (d) of this section.
C 2 H 4 O = Grams/mile C 2 H 4 O (acetaldehyde) as obtained in paragraph (d) of this section. (2)(i) For 2012 and later m odel year ethanol-fueled au tomobiles and automobiles designed to operate on mixtures of gaso line and ethanol, the carbon-related exhaust emissions in grams per mile is to be calcu lated using the following equation and rounded to the nearest 1 gram per mile: CREE = (CWF exHC /0.273×HC) + (1.571×CO) + (1.374×CH 3 OH) + (1.466×HCHO) + (1.911×C 2 H 5 OH) + (1.998×C 2 H 4 O) + CO 2 Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 230 of 339 CWF exHC = Carbon weight fraction of exhaust hydrocarbons = CWF as determined in paragraph (f)(4) of this section. HC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO2 as obtained in paragraph (g) of this section.
CH 3 OH = Grams/mile CH 3 OH (methanol) as obtained in pa ragraph (d) of this section. HCHO = Grams/mile HCHO (formaldehyde) as obt ained in paragraph (g ) of this section.
C 2 H 5 OH = Grams/mile C 2 H 5 OH (ethanol) as obtained in pa ragraph (d) of this section.
C 2 H 4 O = Grams/mile C 2 H 4 O (acetaldehyde) as obtained in paragraph (d) of this section. (ii) For manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter, the carbon-related exhaust emissions in grams per mile for 2012 and later model year ethanol-fueled automobiles and automobiles designed to operate on mixtures of gasoline and ethanol is to be calculated using the following equation and rounded to the nearest 1 gram per mile: CREE = [(CWF exHC /0.273)×NMHC] + ( 1.571×CO) + (1.374×CH 3 OH) + (1.466×HCHO) + (1.911×C 2 H 5 OH) + (1.998×C 2 H 4 O) + CO 2 + (298×N 2 O) + (25×CH 4 ) Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.
CWF exHC = Carbon weight fraction of exhaust hydrocarbons = CWF as determined in paragraph (f)(4) of this section. NMHC = Grams/mile HC as obtained in paragraph (g) of this section. CO = Grams/mile CO as obtained in paragraph (g) of this section.
CO 2 = Grams/mile CO2 as obtained in paragraph (g) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 231 of 339 CH 3 OH = Grams/mile CH 3 OH (methanol) as obtained in pa ragraph (d) of this section. HCHO = Grams/mile HCHO (formaldehyde) as obt ained in paragraph (g ) of this section.
C 2 H 5 OH = Grams/mile C 2 H 5 OH (ethanol) as obtained in pa ragraph (d) of this section.
C 2 H 4 O = Grams/mile C 2 H 4 O (acetaldehyde) as obtained in paragraph (d) of this section.

N 2 O= Grams/mile N 2 O as obtained in paragraph (g) of this section.
CH 4 = Grams/mile CH 4 as obtained in paragra ph (g) of this section. (m) Manufacturers shall determine CO 2 emissions and carbon-related exhaust emissions for electric vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles according to the provisions of this paragr aph (m). Subject to the limitati ons on the number of vehicles produced and delivered for sale as desc ribed in § 86.1866 of this chapter, the manufacturer may be allowed to use a value of 0 grams/mile to represent the emissions of fuel cell vehicles and the propor tion of electric operation of a electric vehicles and plugin hybrid electric vehicles that is derived from electricity th at is generated from sources that are not onboard the vehicl e, as described in paragraphs (m)(1) through (3) of this section. For purposes of labeling under this part, the CO 2 emissions for electric vehicles shall be 0 grams per mile. Similarly, the CO 2 emissions for plug-in hybrid electric vehicles shall be 0 grams per mile for the pr oportion of electric opera tion that is derived from electricity that is generated from sources that are not onboard the vehicle. (1) For 2012 and later model year electric ve hicles, but not including fuel cell vehicles, the carbon-related exhaust emissions in gram s per mile is to be calculated using the following equation and rounded to th e nearest one gram per mile:
CREE = CREE UP - CREE GAS Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 232 of 339 CREE means the carbon-related exhaust emi ssion value as defined in § 600.002, which may be set equal to zero for eligible 2012 th rough 2016 model year electric vehicles for a certain number of vehicles produced and de livered for sale as described in § 86.1866- 12(a) of this chapter.
CREE UP = 0.7670 × EC, and
CREE GAS = 0.2485 × TargetCO 2 , Where: EC = The vehicle energy consumption in watt-hours per mile, determined according to procedures established by the Administrator under § 600.111-08(f). TargetCO 2 = The CO 2 Target Value determined according to § 86.1818 of this chapter for passenger automobiles and light trucks, respectively. (2) For 2012 and later model year plug-in hybr id electric vehicles, the carbon-related exhaust emissions in grams per mile is to be calculated using the following equation and rounded to the nearest one gram per mile:
CREE = CREE CD + CREE CS , Where: CREE means the carbon-related exhaust emi ssion value as defined in § 600.002-08.
CREE CS = The carbon-related exhaust emissions determined for charge-sustaining operation according to procedures esta blished by the Administrator under § 600.111- 08(f); and
CREE CD = (ECF × CREE CDEC ) + [(1-ECF) × CREE CDGAS ] Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 233 of 339 CREE CD = The carbon-related exhaust emission s determined for charge-depleting operation determined according to the provisions of this section for the applicable fuel and according to procedures establishe d by the Administrator under § 600.111-08(f);
CREE CDEC = The carbon-related exhaust emi ssions determined for electricity consumption during charge-depleting operati on, which shall be de termined using the method specified in paragraph (m)(1) of this section and according to procedures established by the Administra tor under § 600.111-08(f), and wh ich may be set equal to zero for a certain number of 2012 through 2016 model year vehicles produced and delivered for sale as describe d in § 86.1866 of this chapter;
CREE CDGAS = The carbon-related exhaust emissi ons determined for charge-depleting operation determined according to the provisions of this section for the applicable fuel and according to procedures established by the Administrator under § 600.111-08(f); and ECF = Electricity consumption factor as determined by the Administrator under § 600.111-08(f). (3) For 2012 and later model year fuel cell vehicles, the ca rbon-related exhaust emissions in grams per mile shall be calcula ted using the method specified in paragraph (m)(1) of this section, except that CREE UP shall be determined according to procedures established by the Administra tor under § 600.111-08(f). As described in § 86.1866 of this chapter the value of CREE may be set equal to zero for a certain number of 2012 through 2016 model year fuel cell vehicles. (n) Equations for fuels other than those specifi ed in paragraphs (h) through (l) of this section may be used with advance EPA approva l. Alternate calculation methods for fuel economy and carbon-related exhaust emissions may be used in lieu of the methodsFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 234 of 339 described in this section if shown to yield eq uivalent or superior results and if approved in advance by the Administrator.

33. A new § 600.114-12 is added to read as follows: § 600.114
‐ 12 Ve hicle

‐ specific 5 ‐ cycle fuel economy and carbon

‐ related exhaust

emission calculations. Paragraphs (a) through (c) of this section ap ply to data used for fuel economy labeling under subpart D of this part. Paragraphs (d) through (f) of this section are used to calculate 5-cycle CO 2 and carbon-related exhaust emission values for the purpose of determining optional credits for CO 2 -reducing technologies u nder § 86.1866 of this chapter. (a) City fuel economy. For each vehicle tested under § 600.010(c)(i) and (ii), determine the 5-cycle city fuel economy using the following equation:

Where:

Where:

Where: Bag Y FE X = the fuel economy in miles per gallon of fuel during the specified bag of the FTP test conducted at an ambien t temperature of 75 °F or 20 °F,Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 235 of 339 and,

Where: US06 City FE = fuel economy in miles pe r gallon over the “city” portion of the US06 test, HFET FE = fuel economy in miles per gallon over the HFET test, SC03 FE = fuel economy in miles per gallon over the SC03 test. (b) Highway fuel economy. (1) For each vehicle tested under § 600.010–08(a) and (c)(1)(ii)(B), determine the 5-cycle highway fuel economy using the following equation:

Where:

Where:

and,

Where: US06 Highway FE = fuel economy in mile per gallon over the highway portion of the US06 test,Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 236 of 339 HFET FE = fuel economy in mile per gallon over the HFET test, SC03 FE = fuel economy in mile per gallon over the SC03 test. (2) If the condition sp ecified in § 600.115–08(b)(2 )(iii)(B) is met, in lieu of using the calculation in paragraph (b)(1) of this section, the manufact urer may optionally determine the highway fuel economy using the following modified 5-cycle equation which utilizes data from FTP, HFET, and US06 tests, and applies mathematic adjustments for Cold FTP and SC03 conditions: (i) Perform a US06 test in addi tion to the FTP and HFET tests. (ii) Determine the 5-cycle highway fuel economy according to the following formula:

Where:

Where:

Bag y FE 75 = the fuel economy in miles per gallon of fuel during the specified bag of the FTP test conducted at an ambient temperature of 75 °F.

Where: US06 Highway FE = fuel economy in miles per gallon over the hi ghway portion of the
US06 test. HFET FE = fuel economy in miles per gallon over the HFET test.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 237 of 339 US06 FE = fuel economy in miles per gallon over the entire US06 test. (c) Fuel economy calculations fo r hybrid electric vehicles. Under the requirements of § 86.1811, hybrid electric vehicles are subject to California test methods which require FTP emission sampling for the 75 °F FTP test ove r four phases (bags) of the UDDS (coldstart, transient, warm-start, transient). Optionally, these four phases may be combined into two phases (phases 1 + 2 and phases 3 + 4). Calculations for these sampling methods follow. (1) Four-bag FTP equations. If the 4-bag sampling method is used, manufacturers may use the equations in paragraphs (a) and (b) of this section to determine city and highway fuel economy estimates. If this method is chos en, it must be used to determine both city and highway fuel economy. Optionally, the fo llowing calculations may be used, provided that they are used to determine both city and highway fuel economy: (i) City fuel economy.

Where:

Where:

andFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 238 of 339 Where: BagY X FE = the fuel economy in miles per gallo n of fuel during the specified bag Y of the FTP test conducted at an ambien t temperature X of 75 °F or 20 °F. US06 City FE = fuel economy in miles per gallon over the city portion of the US06 test. SC03 FE = fuel economy in miles per gallon over the SC03 test. (ii) Highway fuel economy.

Where:

Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 239 of 339 Where: US06 Highway FE = fuel economy in miles per gallon over the Hi ghway portion of the US06 test, HFET FE = fuel economy in miles per gallon over the HFET test, SC03 FE = fuel economy in miles per gallon over the SC03 test. (2) Two-bag FTP equations. If the 2-bag sampling method is used for the 75 °F FTP test, it must be used to determine both city and highway fuel economy. The following calculations must be used to determin e both city and highway fuel economy: (i) City fuel economy.

Where:

Where:

Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 240 of 339 Bag y FE 20 = the fuel economy in miles per gallon of fuel during Bag 1 or Bag 3 of the 20
°F FTP test. Bag x/y FE X = fuel economy in miles per gallon of fuel during combined phases 1 and 2 or phases 3 and 4 of the FTP test conduc ted at an ambient temperature of 75 °F.

Where: US06 City FE = fuel economy in miles per gallon over the city portion of the US06 test, SC03 FE = fuel economy in miles per gallon over the SC03 test. Bag x/y FE X = fuel economy in miles per gallon of fuel during combined phases 1 and 2 or phases 3 and 4 of the FTP test conduc ted at an ambient temperature of 75 °F. (ii) Highway fuel economy.

Where:

Where:

and

andFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 241 of 339 Where: US06 Highway FE = fuel economy in miles pe r gallon over the city portion of the US06 test, SC03 FE = fuel economy in miles per gallon over the SC03 test. Bag y FE 20 = the fuel economy in miles per gallon of fuel during Bag 1 or Bag 3 of the 20
°F FTP test. Bag x/y FE X = fuel economy in miles per gallon of fuel during phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient temperature of 75 °F. (3) For hybrid electric vehicles using the modified 5-cycle highway calculation in paragraph (b)(2) of this secti on, the equation in paragraph (b )(2)(ii)(A) of this section, applies except that the equation for Start Fuel 75 will be replaced with one of the following: (i) The equation for Start Fuel 75 for hybrids tested according to the 4-bag FTP is:

(ii) The equation for Start Fuel 75 for hybrids tested according to the 2-bag FTP is:

(d) City CO 2 emissions and carbon-re lated exhaust emissions. For each vehicle tested, determine the 5-cycle city CO 2 emissions and carbon-related exhaust emissions using the following equation: (1) 

## ( ) E RunningCRE StartCREE 0.905 CityCREE + ×= Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 242 of 339 (i) StartCREE = 

## ( ) ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ ×+ × × 4.1 StartCREE 0.24 StartCREE 0.76 0.33 20 75

Where: 

## ( ) X X X CREE3Bag CREE1Bag3.6 CREEStart

− ×= Where: Bag Y CREE X = the carbon-related exhaust emissi ons in grams per mile during the specified bag of the FTP test conducted at an ambient temperature of 75 °F or 20 °F. (ii) Running CREE = 

### ( ) ( ) ( ) 

### [ ] ( ) ( ) 

### [ ] ( ) ( ) ( ) 

### [ ] CREE Bag20.39 CREE Bag30.61 CREESC03 0.144 CREE Bag30.5 CREE Bag20.50.18 CREECityUS060.11 CREE Bag30.41 CREE Bag20.480.82

75 75 20 20 75

75

×+

×− × + ×+ ×× + × + × + ××

Where: BagY X CREE =carbon-related exhaust emissions in grams per mile over Bag Y at temperature X. US06 City CREE = carbon-related exhaust emi ssions in grams per mile over the “city” portion of the US06 test. SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 test. (2) To determine the City CO 2 emissions, use the appropriate CO 2 grams/mile values instead of CREE values in the equations in paragraph (d)(1) of this section. (e) Highway CO 2 emissions and carbon-re lated exhaust emissions. For each vehicle tested, determine the 5-cycle highway carbon-related exhaust emissions using the following equation: 

## ( ) E RunningCRE StartCREE 0.905E HighwayCRE + ×= Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 243 of 339 (1) StartCREE = 

## ( ) ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ ×+ × ×= 60 StartCREE 0.24 StartCREE 0.76 0.33 20 75

Where: 

## ( ) X X X CREE3Bag CREE1Bag3.6 CREEStart

− ×= (2) Running CREE = 

## ( ) ( ) 

## [ ] ( ) ( ) ( ) 

## [ ] CREE Bag CREE Bag CREESC CREE HFET CREE Highway US

75 75 239.0 361.0 03045.0 21.0 0679.0007.1 ×+ ×− × + ×+ ××

Where: BagY X CREE =carbon-related exhaust emissions in grams per mile over Bag Y at temperature X, US06 Highway CREE = carbon-rela ted exhaust emissions in grams per mile over the highway portion of the US06 test, HFET CREE = carbon-related exhaust emissions in grams per mile over the HFET test, SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 test. (3) To determine the Highway CO 2 emissions, use the appropriate CO 2 grams/mile values instead of CREE values in the equations in paragraphs (e)(1) and (2 ) of this section. (f) CO 2 and carbon-related exhaust emissions calcul ations for hybrid electric vehicles. Hybrid electric vehicles shall be tested according to California test methods which require FTP emission sampling for the 75 °F FTP test over four phases (bags) of the UDDS (cold-start, transient, warm-start, tran sient). Optionally, these four phases may be combined into two phases (phases 1 + 2 a nd phases 3 + 4). Calculations for these sampling methods follow. (1) Four-bag FTP equations. If the 4-bag sampling method is used, manufacturers may use the equations in paragraphs (a) and (b) of this section to determine city and highwayFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 244 of 339 CO 2 and carbon-related exhaust emissions values . If this method is chosen, it must be used to determine both city and highway CO 2 emissions and carbon-related exhaust emissions. Optionally, the following calculati ons may be used, provided that they are used to determine both city and highway CO 2 and carbon-related exhaust emissions values: (i) City CO 2 emissions and carbon-re lated exhaust emissions. 

# ( ) E RunningCRE StartCREE 0.905 CityCREE + ×= Where:

(A) StartCREE = 

# ( ) ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ ×+ × × 4.1 StartCREE 0.24 StartCREE 0.76 0.33 20 75

Where:

( 1 ) StartCREE 75 = 

## ( ) ( ) 75 75 75 

### 4 29.3753 16.3 CREEBag CREEBag CREEBag CREEBag

− × +

− × and ( 2 ) StartCREE 20 = 

# ( ) 20 20 

## 3 16.3 CREEBag CREEBag

− ×= (B) RunningCREE = 

## ( ) ( ) ( ) 

## [ ] ( ) ( ) 

## [ ] ( ) ( ) ( ) 

## [ ] CREE Bag CREE Bag CREESC CREE Bag CREE Bag CREECityUS CREE Bag CREE Bag

75 75 20 20 75

75



### 439.0 361.0 03144.0 35.0 25.018.0 0611.0 341.0 448.082.0

×+ ×− × + ×+ ×× + × + × + ××

Where: US06 Highway CREE = carbon-relate d exhaust emissions in grams per mile over the city portion of the US06 test.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 245 of 339 US06 Highway CREE = carbon-rela ted exhaust emissions in miles per gallon over the Highway portion of the US06 test. HFET CREE = carbon-related exhaust emissions in grams per mile over the HFET test. SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 test. (ii) Highway CO 2 emissions and carbon-re lated exhaust emissions. 

## ( ) E RunningCRE StartCREE 0.905E HighwayCRE + ×= Where:

(A) StartCREE = 

## ( ) ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ ×+ × ×= 60 StartCREE 0.24 StartCREE 0.76 0.33 20 75

Where: 

### ( ) ( ) 75 75 75 75 CREE4Bag CREE2Bag3.9 CREE753Bag CREE1Bag3.6 CREEStart

− × +

− ×=

and 

## ( ) 20 20 20 

### CREE3Bag CREE1Bag3.6 CREEStart

− ×= (B) RunningCREE = 

## ( ) ( ) 

## [ ] ( ) ( ) ( ) 

## [ ] CREE Bag CREE Bag CREESC CREE HFET CREE Highway US

75 75 439.0 361.0 03045.0 21.0 0679.0007.1 ×+ ×− × + ×+ ××

Where: US06 Highway CREE = carbon-rela ted exhaust emissions in grams per mile over the Highway portion of the US06 test, HFET CREE = carbon-related exhaust emissions in grams per mile over the HFET test, SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 test. (2) Two-bag FTP equations. If the 2-bag sampling method is used for the 75 °F FTP test, it must be used to determine both city and highway CO 2 emissions and carbon-relatedFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 246 of 339 exhaust emissions. The following calculations must be used to determine both city and highway CO 2 emissions and carbon-related exhaust emissions: (i) City CO 2 emissions and carbon-related exhaust emissions. 

## ( ) E RunningCRE StartCREE 0.905 CityCREE + ×= Where:

(A) StartCREE = 

## ( ) ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ ×+ × ×= 4.1 StartCREE 0.24 StartCREE 0.76 0.33 20 75

Where: 

## ( ) 75 75 75 CREE3/4Bag CREE1/2Bag3.6 CREEStart

− ×= and 

## ( ) 20 20 20 CREE3Bag CREE1Bag3.6 CREEStart

− ×= Where: Bag Y FE 20 = the carbon-related exhaust emissions in grams per mile of fuel during Bag 1 or Bag 3 of the 20 °F FTP test, and Bag X/Y FE 75 = carbon-related exhaust emissions in grams per mile of fuel during combined phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient temperature of 75 °F. (B) RunningCREE = 

## ( ) ( ) 

## [ ] ( ) ( ) 

## [ ] ( ) 

## [ ] CREE Bag3/4 CREESC03 0.144 CREE Bag30.5 CREE Bag20.50.18 CREECityUS060.10 CREE Bag3/4 0.900.82

75 20 20 75



### − × + ×+ ×× + × + ××

Where: US06 City CREE = carbon-related exhaust emi ssions in grams per mile over the city portion of the US06 test, andFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 247 of 339 SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 test, and Bag X/Y FE 75 = carbon-related exhaust emissions in grams per mile of fuel during combined phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient temperature of 75 °F. (ii) Highway CO 2 emissions and carbon-re lated exhaust emissions. 

# ( ) E RunningCRE StartCREE 0.905E HighwayCRE + ×= Where:

(A) StartCREE = 

## ( ) ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ ×+ × × 60 StartCREE 0.24 StartCREE 0.76 0.33 20 75

Where: 

# ( ) 75 75 75 

### CREE3/4Bag CREE1/2Bag5.7CREEStart

− ×= and 

# ( ) 20 20 20 

### CREE3Bag CREE1Bag3.6 CREEStart

− ×= (B) RunningCREE = 

## ( ) ( ) 

## [ ] [ ] CREE Bag3/4 CREESC03 0.045 CREE HFET0.21 CREE Highway US060.79 1.007

75 

### − × + ×+ ××

Where: US06 Highway CREE = carbon-relate d exhaust emissions in grams per mile over the city portion of the US06 test, and SC03 CREE = carbon-related exhaust emissions in gram per mile over the SC03 test, and Bag Y FE 20 = the carbon-related exhaust emissions in grams per mile of fuel during Bag 1 or Bag 3 of the 20 °F FTP test, andFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 248 of 339 Bag X/Y FE 75 = carbon-related exhaust emissions in grams per mile of fuel during phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient temperature of 75 °F. (3) To determine the City and Highway CO 2 emissions, use the appropriate CO 2 grams/mile values instead of CREE values in the equations in paragr aphs (f)(1) and (2) of this section.

34. Section 600.115-08 is redesignated as § 600.115-11 and is revised to read as follows: § 600.115
‐ 11 Criteria for de termining the fuel economy label calculation method. This section provides the cr iteria to determine if the derived 5-cycle method for determining fuel economy label values, as specified in § 600.210–08 (a)(2) or (b)(2) or § 600.210–12 (a)(2) or (b)(2), as applicable, may be used to determine label values. Separate criteria apply to city and highway fuel economy for each test group. The provisions of this section are optional. If th is option is not chosen, or if the criteria provided in this section are not met, fuel economy label values must be determined according to the vehicle-specific 5-cycl e method specified in § 600.210–08(a)(1) or (b)(1) or § 600.210–12(a)(1) or (b)(1), as applic able. However, dedicated alternative-fuel vehicles, dual fuel vehicles when operating on the alternative fuel, plug-in hybrid electric vehicles, MDPVs, and vehicles imported by Independent Commercial Importers may use the derived 5-cycle method for determining fu el economy label values whether or not the criteria provided in this section are met. (a) City fuel economy criterion. (1) For each test group certified for emission compliance under § 86.1848 of this chapter, the FTP, HFET, US06, SC03 and Cold FTP tests determined to be official under § 86.1835 of this chapter are used to calculate the vehicle-Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 249 of 339 specific 5-cycle city fuel economy which is th en compared to the derived 5-cycle city fuel economy, as follows: (i) The vehicle-specific 5-cycl e city fuel economy from the official FTP, HFET, US06, SC03 and Cold FTP tests for the test group is determined according to the provisions of § 600.114–08(a) or (c) or § 600.114–12(a) or (c) and rounded to the nearest one tenth of a mile per gallon. (ii) Using the same FTP data as used in paragraph (a)(1)(i) of this section, the corresponding derived 5-cycle city fuel economy is calculated according to the following equation:

Where: City Intercept = Intercept determined by the Administrator. See § 600.210–08(a)(2)(iii) or § 600.210–12 (a)(2)(iii). City Slope = Slope determined by the Administrator. See § 600.210–08(a)(2)(iii) or § 600.210–12 (a)(2)(ii). FTP FE = the FTP-based city fuel economy fr om the official test used for certification compliance, determined under § 600.113–08(a), rounded to the nearest tenth. (2) The derived 5-cycle fuel economy value de termined in paragraph (a)(1)(ii) of this section is multiplied by 0.96 and rounded to the nearest one tenth of a mile per gallon. (3) If the vehicle-specific 5-cycle city fuel economy determined in paragraph (a)(1)(i) of this section is greater than or equal to the value determined in paragraph (a)(2) of this section, then the manufacturer may base the city fuel economy estimates for the modelFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 250 of 339 types covered by the test group on the de rived 5-cycle method specified in § 600.210– 08(a)(2) or (b)(2) or § 600.210–12(a)(2 ) or (b)(2), as applicable. (b) Highway fuel economy criterion. The determination for highway fuel economy depends upon the outcome of the determinati on for city fuel economy in paragraph (a)(3) of this section for each test group. (1) If the city determination for a test group ma de in paragraph (a)(3) of this section does not allow the use of the deri ved 5-cycle method, then the highway fuel economy values for all model types represented by the test group are likewise not allowed to be determined using the derived 5-cycle method, and must be determined according to the vehicle-specific 5-cycle method specified in § 600.210–08(a)(1) or (b)(1) or § 600.210– 12(a)(1) or (b)(1), as applicable. (2) If the city determination made in paragra ph (a)(3) of this section allows the use of the derived 5-cycle method, a separate determina tion is made for the highway fuel economy labeling method as follows: (i) For each test group certified for emissi on compliance under § 86.1848 of this chapter, the FTP, HFET, US06, SC03 and Cold FTP te sts determined to be official under § 86.1835 of this chapter are used to calculate the vehicle-specific 5-cycle highway fuel economy, which is then compared to the de rived 5-cycle highway fuel economy, as follows: (A) The vehicle-specific 5-cycle highway fu el economy from the official FTP, HFET, US06, SC03 and Cold FTP tests for the test group is determined according to the provisions of § 600.114–08(b)(1 ) or § 600.114–12(b)(1) and rounde d to the nearest one tenth of a mile per gallon.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 251 of 339 (B) Using the same HFET data as used in paragraph (b)(2)(i)(A) of this section, the corresponding derived 5-cycle highway fuel economy is calculated using the following equation:

Where: Highway Intercept = Inter cept determined by the Ad ministrator. See § 600.210– 08(a)(2)(iii) or § 600.210–12(a)(2)(iii). Highway Slope = Slope determined by the Administrator. See § 600.210–08(a)(2)(iii) or § 600.210–12(a)(2)(iii). HFET FE = the HFET-based highway fuel economy determined under § 600.113–08(b), rounded to the nearest tenth. (ii) The derived 5-cycle highway fuel econom y calculated in paragr aph (b)(2)(i)(B) of this section is multiplied by 0.95 and rounded to the nearest one tenth of a mile per gallon. (iii) (A) If the vehicl e-specific 5-cycle highway fuel ec onomy of the vehicle tested in paragraph (b)(2)(i)(A) of this se ction is greater than or equal to the value determined in paragraph (b)(2)(ii) of this section, then the manufacturer may base the highway fuel economy estimates for the model types covered by the test group on the derived 5-cycle method specified in § 600.210–08(a)(2) or (b)(2) or § 600.210–12(a)(2 ) or (b)(2), as applicable. (B) If the vehicle-specific 5-cycle highw ay fuel economy determined in paragraph (b)(2)(i)(A) of this section is less than the va lue determined in paragr aph (b)(2)(ii) of thisFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 252 of 339 section, the manufacturer may determine the highway fuel economy for the model types covered by the test group on the modifi ed 5-cycle equation specified in § 600.114– 08(b)(2) or § 600.114–12(b)(2). (c) The manufacturer will apply the criteria in paragraph (a) and (b) of this section to every test group for each model year. (d) The tests used to make the evaluations in pa ragraphs (a) and (b) of this section will be the procedures for official test determ inations under § 86.1835. Adjustments and/or substitutions to the official test data may be made with a dvance approval of the Administrator.

35. A new § 600.116-12 is added to subp art B to read as follows: § 600.116
‐ 12 Special pr ocedures related to electric vehicles and plug

‐ in hybrid electric

vehicles. (a) Determine fuel economy label values for electric vehicles as specified in §§ 600.210 and 600.311 using the procedures of SAE J1634 (incorporated by reference in § 600.011), with the following clarifications and modifications: (1) Use one of the following approaches to defi ne end-of-test criteria for vehicles whose maximum speed is less than the maximum speed specified in the driving schedule, where the vehicle’s maximum speed is determined, to the nearest 0.1 m ph, from observing the highest speed over the first dut y cycle (FTP, HFET, etc.): (i) If the vehicle can follow the driving schedule within the speed tolerances specified in § 86.115 of this chapter up to its maximum spee d, the end-of-test criterion is based on theFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 253 of 339 point at which the vehicle can no longer meet the specified speed tolerances up to and including its maximum speed. (ii) If the vehicle cannot follo w the driving schedule within the speed tolerances specified in § 86.115 of this chapter up to its maximum speed, the end-of-test criterion is based on the following procedure: (A) Measure and record the vehicle’s speed (to the nearest 0.1 mph) while making a best effort to follow the specified driving schedule. (B) This recorded sequence of driving speeds becomes the driving schedule for the test vehicle. Apply the end-of-test criterion base d on point at which the vehicle can no longer meet the specified speed tolerances over th is new driving schedule. The driving to establish the new driving schedule may be done separately, or as part of the measurement procedure. (2) Soak time between repeat duty cycles (four-bag FTP, HFET, etc.) may be up to 30 minutes. No recharging may occur during the soak time. (3) Recharging the vehicle’s batt ery must start within three h ours after the end of testing. (4) Do not apply the C coefficient ad justment specified in Section 4.4.2. (5) We may approve alternate measurement proce dures with respect to electric vehicles if they are necessary or appropriate for m eeting the objectives of this part. (b) Determine fuel economy label values for pl ug-in hybrid electric ve hicles as specified in §§ 600.210 and 600.311 using the procedures of SAE J1711 (incorporated by reference in § 600.011), with the following clar ifications and modifications: (1) Calculate a composite value for fuel economy and CO2 emissions representing combined operation during charge-deplete and charge-sustain operation as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 254 of 339 (i) Apply the following utility factors except as specified in this paragraph (b)(1):

Table 1 of § 600.116-12—FTP Phase-Specific Utility Factors Urban Driving, “City”
Phase Distance, mi Cumulative UF Seq. UF 1 3.59 0.125 0.125 2 7.45 0.243 0.118 3 11.04 0.340 0.096 4 14.9 0.431 0.091 5 18.49 0.505 0.074 6 22.35 0.575 0.070 7 25.94 0.632 0.057 8 29.8 0.685 0.054 9 33.39 0.729 0.044 10 37.25 0.770 0.041 11 40.84 0.803 0.033 12 44.7 0.834 0.031 13 48.29 0.859 0.025 14 52.15 0.882 0.023 15 55.74 0.900 0.018 16 59.6 0.917 0.017

Table 2 of § 600.116-12—HFED Cycle- Specific Utility Factors Highway Driving

HFEDS Distance, mi Cumulative UF Seq. UF 1 10.3 0.125 0.125 2 20.6 0.252 0.127 3 30.9 0.378 0.126 4 41.2 0.500 0.121 5 51.5 0.610 0.111 6 61.8 0.707 0.097 7 72.1 0.787 0.080

(ii) You may combine phases during FTP tes ting. For example, you may treat the first 7.45 miles as a single phase by adding the indi vidual utility factor s for that portion ofFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 255 of 339 driving and assigning emission le vels to the combined phase. Do this consistently throughout a test run. (iii) Calculate utility factors using the fo llowing equation for vehicles whose maximum speed is less than the maximum speed specified in the driving schedule, where the vehicle’s maximum speed is determined, to the nearest 0.1 mph, from observing the highest speed over the first dut y cycle (FTP, HFET, etc.):

1 1 1 1 j k n i i ji j i d UF e C UF ND −

= = ⎡ ⎤ ⎛ ⎞ ⎛ ⎞

⎛ ⎞ ⎢ ⎥ =− ⎜ × ⎟− ⎜ ⎟

⎜ ⎟ ⎜ ⎟ ⎝ ⎠ ⎢ ⎥ ⎝ ⎠ ⎝ ⎠ ⎣ ⎦ 

## ∑ ∑

Where:

UF i = the utility factor for phase i . Let UF 0 = 0. j = a counter to identify the appropriate te rm in the summation (with terms numbered consecutively).
k

= the number of terms in the equation (see Table 3 of this section).
d i = the distance driven in phase i

. ND = the normalized distance. Use 399 for both FTP and HFET operation.

C

j = the coefficient for term j from the following table:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 256 of 339 Table 3 of § 600.116-12— City/Highway Specific Utility Factor Coefficients Coefficient City Hwy C 1 14.86 4.80 C 2 2.97 13.00 C 3 -84.05 -65.00 C 4 153.70 120.00 C 5 -43.59 -100.00 C 6 -96.94 31.00 C 7 14.47 — C 8 91.70 — C 9 -46.36 — n = the number of test phases (or bag measurements) before the vehicle reaches the endof-test criterion. (2) The end-of-test criterion is based on a 1 percent Net Energy Change as specified in Section 3.8. The Administrator may approve a lternate Net Energy Cha nge tolerances as specified in Section 3.9.1 or Appendix C if the 1 percent th reshold is insufficient or inappropriate for marking the e nd of charge-deplete operation. (3) Use the vehicle’s Actual Charge-Depleting Range, R cda , as specified in Section 6.1.3 for evaluating the end-of-test criterion. (4) Measure and record AC watt-hours throughout the recharging procedure. Position the measurement downstream of all charging de vices to account for any losses in the charging system. (5) We may approve alternate measurement pr ocedures with respec t to plug-in hybrid electric vehicles if they ar e necessary or appropriate for meeting the objectives of this part.

Subpart C— Procedures for Calculating Fuel Economy and Carbon

‐ relat ed Exhaust

Emission ValuesFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 257 of 339 36. The heading for subpart C is revised as set forth above. § 600.201
‐ 08, § 600.201
‐ 12, § 600.201
‐ 86, § 600.201
‐ 93, § 600.202
‐ 77, § 600.203
‐ 77, §

600.204
‐ 77, § 600.205
‐ 77, § 600.206
‐ 86, § 600.206
‐ 93, § 600.207
‐ 86, § 600.207
‐ 93, §

600.208
‐ 77, § 600.209
‐ 85, § 600.209
‐ 95—[Removed]

37. Subpart C is am ended by rem oving the following sections: § 600.201-08 § 600.201-12 § 600.201-86 § 600.201-93 § 600.202-77 § 600.203-77 § 600.204-77 § 600.205-77 § 600.206-86 § 600.206-93 § 600.207-86 § 600.207-93 § 600.208-77 § 600.209-85 § 600.209-95 § 600.211-08Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 258 of 339 38. Section 600.206-12 is revised to read as follows: § 600.206
‐ 12 Calculation and use of FTP ‐ based and HFET ‐ based fuel ec onomy, CO 2 emissions, and carbon

‐ related exhaust emission values for vehicle configurations. (a) Fuel economy, CO 2 emissions, and carbon-related exhaust emissions values determined for each vehicle under § 600.113-08(a) and (b) and as approved in § 600.008 (c), are used to determine FTP-based city, HFET-based highway, and combined FTP/Highway-based fuel economy, CO 2 emissions, and carbon-related exhaust emission values for each vehicle configura tion for which data are available. (1) If only one set of FTP-based city and HFET-based highway fuel economy values is accepted for a vehicle configuration, these valu es, rounded to the nearest tenth of a mile per gallon, comprise the city a nd highway fuel economy values for that configuration. If only one set of FTP-based city and HFET-based highway CO 2 emissions and carbonrelated exhaust emission valu es is accepted for a vehicle configuration, these values, rounded to the nearest gram per mile , comprise the city and highway CO 2 emissions and carbon-related exhaust emission valu es for that configuration. (2) If more than one set of FTP-based city and HFET-based highway fuel economy and/or carbon-related exhaust emission values are accepted for a vehicle configuration: (i) All data shall be grouped according to the subconfiguration for which the data were generated using sales projections supp lied in accordance with § 600.208-12(a)(3). (ii) Within each group of data, all fuel economy values are harmonically averaged and rounded to the nearest 0.0001 of a mile per gallon and all CO 2 emissions and carbonrelated exhaust emission values are arithme tically averaged and rounded to the nearest tenth of a gram per mile in order to dete rmine FTP-based city and HFET-based highwayFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 259 of 339 fuel economy, CO 2 emissions, and carbon-related exhaust emission values for each subconfiguration at which the ve hicle configuration was tested. (iii) All FTP-based city fuel economy, CO 2 emissions, and carbon-related exhaust emission values and all HFET-based highway fuel economy and carbon-related exhaust emission values calculated in paragraph (a)(2)(i i) of this section are (separately for city and highway) averaged in proportion to the sales fraction (rounded to the nearest 0.0001) within the vehicle configurat ion (as provided to the Admini strator by the manufacturer) of vehicles of each tested subconfigurati on. Fuel economy values shall be harmonically averaged, and CO 2 emissions and carbon-related e xhaust emission values shall be arithmetically averaged. The resultant fu el economy values, rounded to the nearest 0.0001 mile per gallon, are the FTP-based ci ty and HFET-based highway fuel economy values for the vehicle conf iguration. The resultant CO 2 emissions and carbon-related exhaust emission values, rounded to the neares t tenth of a gram per mile, are the FTPbased city and HFET-based highway CO 2 emissions and carbon-related exhaust emission values for the vehicle configuration. (3)(i) For the purpose of determining average fuel economy under § 600.510, the combined fuel economy value for a vehicle c onfiguration is calculated by harmonically averaging the FTP-based city and HFET-based highway fuel economy values, as determined in paragraph (a)(1 ) or (2) of this section, we ighted 0.55 and 0.45 respectively, and rounded to the nearest 0.0001 mile per gallon. A sample of this calculation appears in Appendix II of this part. (ii) For the purpose of determining aver age carbon-related exhaust emissions under § 600.510, the combined carbon-related exhaust emi ssion value for a vehicle configurationFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 260 of 339 is calculated by arithmetically averaging the FTP-based city and HFET-based highway carbon-related exhaust emission values, as determ ined in paragraph (a)(1) or (2) of this section, weighted 0.55 and 0.45 respectively, and rounded to the nearest tenth of gram per mile. (4) For alcohol dual fuel automobiles and natural gas dual fuel automobiles the procedures of paragraphs (a)(1) or (2) of this section, as applicable, shall be used to calculate two separate sets of FTP-based city, HFET-based highway, and combined values for fuel economy, CO 2 emissions,and carbon-related exhaust emissions for each configuration. (i) Calculate the city, highwa y, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emission values from the te sts performed using gasoline or diesel test fuel. (ii) Calculate the city, highway, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emission values from the tests performed usi ng alcohol or natural gas test fuel. (b) If only one equivalent petroleum-based fuel economy value exists for an electric vehicle configuration, that valu e, rounded to the nearest tenth of a mile per gallon, will comprise the petroleum-based fuel economy for that configuration. (c) If more than one equivalent petroleum-based fuel economy value exists for an electric vehicle configuration, all values for that ve hicle configuration are harmonically averaged and rounded to the nearest 0.0001 mile pe r gallon for that configuration.

39. A new § 600.207-12 is added to read as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 261 of 339 § 600.207
‐ 12 Calculation and use of vehicle

‐ specific 5 ‐ cycle

‐ based fue l economy and

CO 2 emission values for vehicle configurations. (a) Fuel economy and CO 2 emission values determined for each vehicle under § 600.114 and as approved in § 600.008(c), are used to determine vehicle-specif ic 5-cycle city and highway fuel economy and CO 2 emission values for each vehicle configuration for which data are available. (1) If only one set of 5-cycle city and highway fuel economy and CO 2 emission values is accepted for a vehicle configuration, these va lues, where fuel economy is rounded to the nearest tenth of a mile per gallon and the CO 2 emission value in grams per mile is rounded to the nearest whole number, compri se the city and highway fuel economy and
CO 2 emission values for that configuration. (2) If more than one set of 5-cycle city and highway fuel economy and CO 2 emission values are accepted for a vehicle configuration: (i) All data shall be grouped according to the subconfiguration for which the data were generated using sales projections supp lied in accordance with § 600.209-12(a)(3). (ii) Within each subconfiguration of data , all fuel economy values are harmonically averaged and rounded to the ne arest 0.0001 of a mile per gallon in order to determine 5- cycle city and highway fuel economy values for each subconfiguration at which the vehicle configuration was tested, and all CO 2 emissions values are arithmetically averaged and rounded to the near est tenth of gram per mile to determine 5-cycle city and highway CO 2 emission values for each subconfiguration at which the vehicle configuration was tested.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 262 of 339 (iii) All 5-cycle city fuel economy values a nd all 5-cycle highway fuel economy values calculated in paragraph (a)(2)( ii) of this section are (separately for city and highway) averaged in proportion to the sales fraction (rounded to the neares t 0.0001) within the vehicle configuration (as provi ded to the Administrator by th e manufacturer) of vehicles of each tested subconfiguration. The result ant values, rounded to the nearest 0.0001 mile per gallon, are the 5-cycle city and 5-cycle hi ghway fuel economy values for the vehicle configuration. (iv) All 5-cycle city CO 2 emission values and all 5-cycle highway CO 2 emission values calculated in paragraph (a)(2)( ii) of this section are (separately for city and highway) averaged in proportion to the sales fraction (rounded to the neares t 0.0001) within the vehicle configuration (as provi ded to the Administrator by th e manufacturer) of vehicles of each tested subconfiguration. The result ant values, rounded to the nearest 0.1 grams per mile, are the 5-cycle city and 5-cycle highway CO 2 emission values for the vehicle configuration. (3) [Reserved] (4) For alcohol dual fuel automobiles and natural gas dual fuel automobiles the procedures of paragraphs (a)(1) and (2) of this section shall be used to calculate two separate sets of 5-cycle city and highway fuel economy and CO 2 emission values for each configuration. (i) Calculate the 5-cycle city and highway fuel economy and CO 2 emission values from the tests performed using gaso line or diesel test fuel.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 263 of 339 (ii)(A) Calculate the 5-cycle city and highway fuel economy and CO 2 emission values from the tests performed using al cohol or natural gas test fuel , if 5-cycle testing has been performed. Otherwise, the procedure in § 600.210-12(a)(3) or (b)(3) applies. (b) If only one equivalent petroleum-based fuel economy value exists for an electric configuration, that value, rounded to the neares t tenth of a mile per gallon, will comprise the petroleum-based 5-cycle fuel economy for that configuration. (c) If more than one equivalent petroleum-based 5-cycle fuel economy value exists for an electric vehicle configuration, all values for that vehicle configuration are harmonically averaged and rounded to the nearest 0.0001 m ile per gallon for that configuration.

40. Section 600.208-12 is revised to read as follows: § 600.208
‐ 12 Calculation of FTP ‐ based and HFET ‐ based fuel economy, CO 2 emissions,

and carbon

‐ related exhaust emissions for a model type. (a) Fuel economy, CO 2 emissions, and carbon-related exha ust emissions for a base level are calculated from vehicle configuration fuel economy, CO 2 emissions, and carbonrelated exhaust emissions as determined in § 600.206–12(a), (b), or (c) as applicable, for low-altitude tests. (1) If the Administrator determines that auto mobiles intended for sale in the State of California and in section 177 states are likely to exhibit significant differences in fuel economy, CO 2 emissions, and carbon-related exhaus t emissions from those intended for sale in other states, she w ill calculate fuel economy, CO 2 emissions, and carbon-related exhaust emissions for each base level for vehi cles intended for sale in California and inFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 264 of 339 section 177 states and for each base level for ve hicles intended for sale in the rest of the

states. (2) In order to highlight the fuel efficiency, CO 2 emissions, and carbon-related exhaust emissions of certain designs otherwise includ ed within a model type, a manufacturer may wish to subdivide a model type into one or more additional model types. This is accomplished by separating subconfigurations from an existing base level and placing them into a new base level. The new base level is identical to the existing base level except that it shall be considered, for the pur poses of this paragra ph, as containing a new basic engine. The manufacturer will be pe rmitted to designate such new basic engines and base level(s) if: (i) Each additional model type resulting from division of another model type has a unique car line name and that name appears on the label and on the vehicle bearing that label; (ii) The subconfigurations included in the ne w base levels are not included in any other base level which differs only by basic engine (i.e., they are no t included in the calculation of the original base level fuel economy values); and (iii) All subconfigurations within the new ba se level are represented by test data in accordance with § 600.010(c)(1)(ii). (3) The manufacturer shall supply total model year sales projections for each car line/vehicle subconfiguration combination. (i) Sales projections must be supplied separately for each car line-vehicle subconfiguration intended for sale in California and each car line/vehicle subconfiguration intended for sale in the rest of the states if required by the Administrator under paragraph (a)(1) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 265 of 339 (ii) Manufacturers shall update sales projections at the tim e any model type value is calculated for a label value. (iii) The provisions of paragraph (a)(3) of th is section may be satisfied by providing an amended application for certification, as described in § 86.1844 of this chapter. (4) Vehicle configurat ion fuel economy, CO 2 emissions, and carbon-related exhaust emissions, as determined in § 600.206–12 (a), (b) or (c), as applicable, are grouped according to base level. (i) If only one vehicle configuration within a base level has been tested, the fuel economy, CO 2 emissions, and carbon-related exha ust emissions from that vehicle configuration will consti tute the fuel economy, CO 2 emissions, and carbon-related exhaust emissions for that base level. (ii) If more than one vehicle configuration wi thin a base level has been tested, the vehicle configuration fuel economy values are ha rmonically averaged in proportion to the respective sales fraction (rounded to the ne arest 0.0001) of each vehicle configuration and the resultant fuel economy value rounded to the nearest 0.0001 mile per gallon; and the vehicle configuration CO 2 emissions and carbon-related exhaust emissions are arithmetically averaged in proportion to the respective sales fr action (rounded to the nearest 0.0001) of each vehicl e configuration and the resu ltant carbon-related exhaust emission value rounded to the nearest tenth of a gram per mile. (5) The procedure specified in paragraph (a )(1) through (4) of th is section will be repeated for each base level, thus esta blishing city, highway, and combined fuel economy, CO 2 emissions, and carbon-related exhaust emissions for each base level. (6) [Reserved]Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 266 of 339 (7) For alcohol dual fuel automobiles and natural gas dual fuel automobiles, the procedures of paragraphs (a)(1) through (6) of this section shall be used to calculate two separate sets of city, highwa y, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emissions for each base level. (i) Calculate the city, highwa y, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emissions from the tests performed using ga soline or diesel test fuel. (ii) Calculate the city, highway, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emissions from the tests performed using alcohol or natural gas test fuel. (b) For each model type, as determined by the Administrator, a city, highway, and combined fuel economy value, CO 2 emission value, and a carbon-related exhaust emission value will be calculated by using the projected sales and values for fuel economy, CO 2 emissions, and carbon-related exhaust emissions for each base level within the model type. Separate model t ype calculations will be done based on the vehicle configuration fuel economy, CO 2 emissions, and carbon-related exhaust emissions as determined in § 600.206–12 (a ), (b) or (c), as applicable. (1) If the Administrator determines that auto mobiles intended for sale in the State of California and in section 177 states are likely to exhibit significant differences in fuel economy, CO 2 emissions, and carbon-related exhaus t emissions from those intended for sale in other states, he or she will calculate values for fuel economy, CO 2 emissions, and carbon-related exhaust emissions for each model type for vehicles intended for sale in California and in section 177 states and for each model type for vehicles intended for sale in the rest of the states.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 267 of 339 (2) The sales fraction for each base level is calculated by dividing the projected sales of the base level within the model type by th e projected sales of the model type and rounding the quotient to the nearest 0.0001. (3)(i) The FTP-based city fuel economy valu es of the model type (calculated to the nearest 0.0001 mpg) are determined by dividi ng one by a sum of terms, each of which corresponds to a base level and which is a fraction determined by dividing: (A) The sales fraction of a base level; by (B) The FTP-based city fuel economy value for the respective base level. (ii) The FTP-based city carbon-related e xhaust emission value of the model type (calculated to the nearest gram per mile) are determined by a sum of terms, each of which corresponds to a base level and which is a product determined by multiplying: (A) The sales fraction of a base level; by (B) The FTP-based city carbon-related exha ust emission value for the respective base level. (iii) The FTP-based city CO 2 emissions of the model type (c alculated to the nearest gram per mile) are determined by a sum of terms, each of which corresponds to a base level and which is a product determined by multiplying: (A) The sales fraction of a base level; by (B) The FTP-based city CO2 emissions for the respective base level. (4) The procedure specified in pa ragraph (b)(3) of this section is repeated in an analogous manner to determine the highway and combined fuel economy, CO 2 emissions, and carbon-related exhaust emissions for the model type.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 268 of 339 (5) For alcohol dual fuel automobiles and natural gas dual fuel automobiles, the procedures of paragraphs (b)(1 ) through (4) of this section shall be used to calculate two separate sets of city, highwa y, and combined fuel economy values and two separate sets of city, highway, and combined CO 2 and carbon-related exhaust emission values for each model type. (i) Calculate the city, highwa y, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emission values from the te sts performed using gasoline or diesel test fuel. (ii) Calculate the city, highway, and combined fuel economy, CO 2 emissions, and carbonrelated exhaust emission values from the tests performed usi ng alcohol or natural gas test fuel.

41. A new § 600.209-12 is added to read as follows: § 600.209
‐ 12 Calculation of vehicle

‐ specific 5 ‐ cycle fuel ec onomy and CO 2 emission

values for a model type. (a) Base level. 5-cycle fuel economy and CO 2 emission values for a base level are calculated from vehicle configura tion 5-cycle fuel economy and CO 2 emission values as determined in § 600.207 for low-altitude tests. (1) If the Administrator determines that auto mobiles intended for sale in the State of California are likely to exhibit signifi cant differences in fuel economy and CO 2 emissions from those intended for sale in other st ates, he will calculate fuel economy and CO 2 emission values for each base level for vehicles intended for sale in California and for each base level for vehicles intended fo r sale in the rest of the states.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 269 of 339 (2) In order to highlight the fuel efficiency and CO 2 emissions of certain designs otherwise included within a m odel type, a manufacturer may wish to subdivide a model type into one or more additional model types. This is accomplished by separating subconfigurations from an existing base leve l and placing them into a new base level. The new base level is identical to the ex isting base level except that it shall be considered, for the purposes of this paragr aph, as containing a ne w basic engine. The manufacturer will be permitted to designate such new basic engines and base level(s) if: (i) Each additional model type resulting from division of another model type has a unique car line name and that name appears on the label and on the vehicle bearing that label; (ii) The subconfigurations included in the ne w base levels are not included in any other base level which differs only by basic engine ( i.e. , they are not included in the calculation of the original base level fuel economy values); and (iii) All subconfigurations within the new ba se level are represented by test data in accordance with § 600.010(c)(ii). (3) The manufacturer shall supply total model year sales projections for each car line/vehicle subconfiguration combination. (i) Sales projections must be supplied separately for each car line-vehicle subconfiguration intended for sale in California and each car line/vehicle subconfiguration intended for sale in the rest of the states if required by the Administrator under paragraph (a)(1) of this section. (ii) Manufacturers shall update sales projections at the tim e any model type value is calculated for a label value.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 270 of 339 (iii) The provisions of this paragraph (a)(3 ) may be satisfied by providing an amended application for certification, as desc ribed in § 86.1844 of this chapter. (4) 5-cycle vehicle configuration fuel economy and CO 2 emission values, as determined in § 600.207–12(a), (b), or (c), as applicab le, are grouped according to base level. (i) If only one vehicle configuration within a base level has been tested, the fuel economy and CO 2 emission values from that vehicle conf iguration constitute the fuel economy and
CO 2 emission values for that base level. (ii) If more than one vehicle configuration wi thin a base level has been tested, the vehicle configuration fuel economy values are ha rmonically averaged in proportion to the respective sales fraction (rounded to the ne arest 0.0001) of each vehicle configuration and the resultant fuel economy value rounde d to the nearest 0.0001 mile per gallon. (iii) If more than one vehicl e configuration within a base level has been tested, the vehicle configuration CO 2 emission values are arithmetical ly averaged in proportion to the respective sales fraction (rounded to the nearest 0.0001) of each vehicle configuration and the resultant CO 2 emission value rounded to the nearest 0.1 gram per mile. (5) The procedure specified in § 600.209–12 (a) will be repeated for each base level, thus establishing city and high way fuel economy and CO 2 emission values for each base level. (6) [Reserved] (7) For alcohol dual fuel automobiles and natural gas dual fuel automobiles, the procedures of paragraphs (a)(1) through (6) of this section shall be used to calculate two separate sets of city, highway, and combined fuel economy and CO 2 emission values for each base level.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 271 of 339 (i) Calculate the city and highway fuel economy and CO 2 emission values from the tests performed using gasoline or diesel test fuel. (ii) If 5-cycle testing was pe rformed on the alcohol or natura l gas test fuel, calculate the city and highway fuel economy and CO 2 emission values from the tests performed using alcohol or natural gas test fuel. (b) Model type. For each model type, as determined by the Administrator, city and highway fuel economy and CO 2 emissions values will be calculated by using the projected sales and fuel economy and CO 2 emission values for each base level within the model type. Separate model type calcula tions will be done based on the vehicle configuration fuel economy and CO 2 emission values as determined in § 600.207, as applicable. (1) If the Administrator determines that auto mobiles intended for sale in the State of California are likely to exhibit signifi cant differences in fuel economy and CO 2 emissions from those intended for sale in other st ates, he will calculate fuel economy and CO 2 emission values for each model type for vehicl es intended for sale in California and for each model type for vehicles intended fo r sale in the rest of the states. (2) The sales fraction for each base level is calculated by dividing the projected sales of the base level within the model type by th e projected sales of the model type and rounding the quotient to the nearest 0.0001. (3)(i) The 5-cycle city fuel economy values of the model type (calculated to the nearest 0.0001 mpg) are determined by dividing one by a sum of terms, each of which corresponds to a base level and which is a fraction determined by dividing: (A) The sales fraction of a base level; byFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 272 of 339 (B) The 5-cycle city fuel economy va lue for the respective base level. (ii) The 5-cycle city CO 2 emissions of the model type (cal culated to the nearest tenth of a gram per mile) are determined by a sum of te rms, each of which corresponds to a base level and which is a product determined by multiplying: (A) The sales fraction of a base level; by (B) The 5-cycle city CO 2 emissions for the respective base level. (4) The procedure specified in pa ragraph (b)(3) of this section is repeated in an analogous manner to determine the highway and combined fuel economy and CO 2 emission values for the model type. (5) For alcohol dual fuel automobiles and natural gas dual fuel automobiles the procedures of paragraphs (b)(1 ) through (4) of this section shall be used to calculate two separate sets of city a nd highway fuel economy and CO 2 emission values for each model type. (i) Calculate the city and highway fuel economy and CO 2 emission values from the tests performed using gasoline or diesel test fuel. (ii) Calculate the city, highway, and combined fuel economy and CO 2 emission values from the tests performed using alcohol or natural gas test fuel, if 5-cycle testing was performed on the alcohol or natural gas test fuel. Otherw ise, the procedure in § 600.210- 12(a)(3) or (b)(3) applies.

42. Section 600.210-08 is amended by adding pa ragraph (f) to read as follows: § 600.210
‐ 08 Calculation of fu el economy values for labeling.

* * * * *Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 273 of 339 (f) Sample calculations . An example of the calculation re quired in this subpart is in Appendix III of this part.

43. A new § 600.210-12 is added to read as follows: § 600.210
‐ 12 Calculation of fu el economy and CO 2 emission values for labeling. (a) General labels. Except as specified in paragraphs (d) and (e) of this section, fuel economy and CO 2 emissions for general labels may be determined by one of two methods. The first is based on vehicle-specific model-type 5-cycle data as determined in § 600.209–12(b). This method is available for all vehicles and is required for vehicles that do not qualify for the second method as described in § 600.115 (o ther than electric vehicles). The second method, the derived 5-cycle method, is based on fuel economy and
CO 2 emissions that are derived from vehicl e-specific 5-cycle m odel type data as determined in paragraph (a)(2 ) of this section. Manufacturer s may voluntarily lower fuel economy values and raise CO 2 values if they determine that the label values from any method are not representative of the fuel economy or CO 2 emissions for that model type. (1) Vehicle-specific 5-cycle labels. The city and highway model type fuel economy determined in § 600.209–12(b), rounded to the nearest mpg, and the city and highway model type CO 2 emissions determined in § 600.209–12( b), rounded to the nearest gram per mile, comprise the fuel economy and CO 2 emission values for general fuel economy labels, or, alternatively; (2) Derived 5-cycle labels. Derived 5-cycle city and highway label values are determined according to the following method:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 274 of 339 (i)(A) For each model type, determine the deri ved five-cycle city fuel economy using the following equation and coefficients determined by the Administrator:

Where: City Intercept = Intercept determined by th e Administrator based on historic vehiclespecific 5-cycle city fuel economy data. City Slope = Slope determined by the Administ rator based on historic vehicle-specific 5- cycle city fuel economy data. MT FTP FE = the model type FTP-based city fuel economy determined under § 600.208– 12(b), rounded to the nearest 0.0001 mpg. (B) For each model type, determine the derived five-cycle city CO 2 emissions using the following equation and coefficients determined by the Administrator:

2 2 CO FTP MT Slope} {City Intercept} {City COCity cycle5 Derived × + = − Where: City Intercept = Intercept determined by th e Administrator based on historic vehiclespecific 5-cycle city fuel economy data. City Slope = Slope determined by the Administ rator based on historic vehicle-specific 5- cycle city fuel economy data.
MT FTP CO 2 = the model type FTP-based city CO 2 emissions determined under § 600.208–12(b), rounded to the nearest 0.1 grams per mile. (ii)(A) For each model type, determine th e derived five-cycle highway fuel economy using the equation below and coefficien ts determined by the Administrator:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 275 of 339 Where: Highway Intercept = Intercept determined by the Administrator base d on historic vehiclespecific 5-cycle highway fuel economy data. Highway Slope = Slope determined by the Administrator based on historic vehiclespecific 5-cycle highway fuel economy data. MT HFET FE = the model type highway fuel economy determined under § 600.208– 12(b), rounded to the nearest 0.0001 mpg. (B) For each model type, determine the derived five-cycle highway CO 2 emissions using the equation below and coefficients determined by the Administrator:

2 2 CO HFET MT Slope} {Highway Intercept} {Highway CO Highway cycle5 Derived × + = −

Where: Highway Intercept = Intercept determined by the Administrator base d on historic vehiclespecific 5-cycle highway fuel economy data. Highway Slope = Slope determined by the Administrator based on historic vehiclespecific 5-cycle highway fuel economy data.
MT HFET CO 2 = the model type highway CO 2 emissions determined under § 600.208– 12(b), rounded to the nearest 0.1 grams per mile. (iii) Unless and until supers eded by written guidance from the Administrator, the following intercepts and slopes sh all be used in the equations in paragraphs (a)(2)(i) and (a)(2)(ii) of this section: City Intercept = 0.003259.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 276 of 339 City Slope = 1.1805. Highway Intercept = 0.001376. Highway Slope = 1.3466. (iv) The Administrator will periodically update the slopes and intercepts through guidance and will determine the model year that the new coefficients must take effect. The Administrator will issue guidance no later than six mo nths prior to the earliest starting date of the effective model year (e .g., for 2011 models, the earliest start of the model year is January 2, 2010, so guidance would be issued by July 1, 2009.) Until otherwise instructed by written guidance from the Administrator, manufacturers must use the coefficients that are currently in effect. (3) General alternate fuel economy and CO 2 emissions label values for dual fuel vehicles. (i)(A) City and Highway fuel economy labe l values for dual fuel alcohol-based and natural gas vehicles when using the altern ate fuel are separately determined by the following calculation:

Where:

FE alt = The unrounded FTP-based model-type city or HFET-based model-type highway fuel economy from the alternate fuel, as determined in § 600.208-12(b)(5)(ii). 5cycle FE gas = The unrounded vehicle-specific or de rived 5-cycle model-type city or highway fuel economy, as determined in para graph (a)(1) or (a)(2) of this section.

FE gas = The unrounded FTP-based city or HFET-ba sed model type highway fuel economy from gasoline (or diesel), as de termined in § 600.208-12(b)(5)(i).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 277 of 339 The result, rounded to the nearest whole number, is the alternate fuel label value for dual fuel vehicles. (B) City and Highway CO 2 label values for dual fuel alcohol-based and natural gas vehicles when using the alternate fuel ar e separately determined by the following calculation:

gas gas alt alt 

### CO COcycle CO CODerived 2 25 22 ×=

Where:
CO2 alt = The unrounded FTP-based model-type city or HFET-based model-type CO 2 emissions value from the alternate fuel , as determined in § 600.208-12(b)(5)(ii). 5cycle CO2 gas = The unrounded vehicle-specific or de rived 5-cycle model-type city or highway CO 2 emissions value, as determined in para graph (a)(1) or (a)( 2) of this section.
CO2 gas = The unrounded FTP-based city or HFET-based model type highway CO 2 emissions value from gasoline (or diesel ), as determined in § 600.208-12(b)(5)(i). The result, rounded to the nearest whol e number, is the alternate fuel CO 2 emissions label value for dual fuel vehicles. (ii) Optionally, if complete 5- cycle testing has been perfor med using the alternate fuel, the manufacturer may choose to use the alternat e fuel label city or highway fuel economy and CO 2 emission values determined in § 600.209–12(b)(5)(ii), rounded to the nearest whole number. (4) General alternate fuel economy and CO 2 emissions label values for electric vehicles. Determine FTP-based city and HFET-based highway fuel economy label values for electric vehicles as described in § 600.116. Convert W-hour/mile results to miles per kW-hr and miles per gasoline gallon equivalent gallon. CO 2 label information is basedFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 278 of 339 on tailpipe emissions only, so CO 2 emissions from electric vehicles are assumed to be

zero. (b) Specific Labels. Except as specified in paragraphs (d) and (e) of this section, fuel economy and CO 2 emissions for specific labels may be determined by one of two methods. The first is based on vehicle-specific configuration 5-cycle data as determined in § 600.207. This method is available for all vehi cles and is required for vehicles that do not qualify for the second method as described in § 600.115 (other than electric vehicles). The second method, the derived 5-cycle method, is based on fuel economy and CO 2 emissions that are derived from vehicle-specif ic 5-cycle configuration data as determined in paragraph (b)(2) of this section. Manuf acturers may voluntarily lower fuel economy values and raise CO 2 values if they determine that the label values from either method are not representative of the fuel economy or CO 2 emissions for that model type. (1) Vehicle-specific 5-cycle labels. The city and highway configuration fuel economy determined in § 600.207, rounded to the nearest mpg, and the city and highway configuration CO 2 emissions determined in § 600.207, rounded to the nearest gram per mile, comprise the fuel economy and CO 2 emission values for specific fuel economy labels, or, alternatively; (2) Derived 5-cycle labels. Specific city and highway label values from derived 5-cycle are determined according to the following method: (i)(A) Determine the derived five-cycle city fuel economy of the configuration using the equation below and coefficients de termined by the Administrator:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 279 of 339 Where: City Intercept = Intercept determined by th e Administrator based on historic vehiclespecific 5-cycle city fuel economy data. City Slope = Slope determined by the Administ rator based on historic vehicle-specific 5- cycle city fuel economy data. Config FTP FE = the confi guration FTP-based city fuel economy determined under § 600.206, rounded to the nearest 0.0001 mpg. (B) Determine the derived five-cycle city CO 2 emissions of the configuration using the equation below and coefficients de termined by the Administrator:

2 2 CO FTP Config Slope} {City Intercept} {City COCity cycle5 Derived × + = − Where: City Intercept = Intercept determined by th e Administrator based on historic vehiclespecific 5-cycle city fuel economy data. City Slope = Slope determined by the Administ rator based on historic vehicle-specific 5- cycle city fuel economy data. Config FTP CO 2 = the configuration FTP-based city CO 2 emissions determined under § 600.206, rounded to the nearest 0.1 grams per mile. (ii)(A) Determine the derived five-cycle highway fuel economy of the configuration using the equation below and coefficien ts determined by the Administrator:

Where:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 280 of 339 Highway Intercept = Intercept determined by the Administrator base d on historic vehiclespecific 5-cycle highway fuel economy data. Highway Slope = Slope determined by the Administrator based on historic vehiclespecific 5-cycle highway fuel economy data. Config HFET FE = the configuration highway fuel economy determined under § 600.206, rounded to the nearest tenth. (B) Determine the derived five-cycle highway CO 2 emissions of the configuration using the equation below and coefficients determined by the Administrator:

2 2 CO HFET Config Slope} {Highway Intercept} {Highway CO Highway cycle5 Derived × + = −

Where: Highway Intercept = Intercept determined by the Administrator base d on historic vehiclespecific 5-cycle highway fuel economy data. Highway Slope = Slope determined by the Administrator based on historic vehiclespecific 5-cycle highway fuel economy data. Config HFET CO 2 = the configuration highway fuel economy determined under § 600.206, rounded to the nearest tenth. (iii) The slopes and intercepts of paragr aph (a)(2)(iii) of this section apply. (3) Specific alternate fuel economy and CO 2 emissions label values for dual fuel vehicles. (i)(A) Specific city and highway fuel economy label values for dual fuel alcohol-based and natural gas vehicles when using the alternate fuel are separately determined by the following calculation:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 281 of 339 Where:

FE alt = The unrounded FTP-based configuration city or HFET-based configuration highway fuel economy from the alternate fuel, as determined in § 600.206. 5cycle FE gas = The unrounded vehicle-specific or deri ved 5-cycle configuration city or highway fuel economy as determined in para graph (b)(1) or (b)(2) of this section.

FE gas = The unrounded FTP-based city or HFET- based configuration highway fuel economy from gasoline, as determined in § 600.206. The result, rounded to the nearest whole number, is the alternate fuel label value for dual fuel vehicles. (B) Specific city and highway CO 2 emission label values for dual fuel alcohol-based and natural gas vehicles when using the altern ate fuel are separately determined by the following calculation:

gas gas alt alt 

### CO COcycle CO CODerived 2 25 22 ×=

Where:
CO2 alt = The unrounded FTP-based configuration city or HFET-based configuration highway CO 2 emissions value from the alternate fuel, as determined in § 600.206. 5cycle CO2 gas = The unrounded vehicle-specific or de rived 5-cycle configuration city or highway CO 2 emissions value as determined in para graph (b)(1) or (b)(2 ) of this section.
CO2 gas = The unrounded FTP-based city or HF ET-based configuration highway CO 2 emissions value from gasoline, as determined in § 600.206.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 282 of 339 The result, rounded to the nearest whol e number, is the alternate fuel CO 2 emissions label value for dual fuel vehicles. (ii) Optionally, if complete 5- cycle testing has been perfor med using the alternate fuel, the manufacturer may choose to use the alternat e fuel label city or highway fuel economy and CO 2 emission values determined in § 600.207–12(a)(4)(ii), rounded to the nearest whole number. (4) Specific alternate fuel economy and CO 2 emissions label values for electric vehicles. Determine FTP-based city and HFET-based highway fuel economy label values for electric vehicles as described in § 60 0.116. Determine these values by running the appropriate repeat test cycles . Convert W-hour/mile results to miles per kW-hr and miles per gasoline gallon equivalent. CO 2 label information is ba sed on tailpipe emissions only, so CO 2 emissions from electric vehicl es are assumed to be zero. (c) Calculating combined fuel economy. (1) For the purposes of calculating the combined fuel economy for a model type, to be used in displaying on the label and for determining annual fuel costs under subpart D of this pa rt, the manufacturer shall use one of the following procedures: (i) For gasoline-fueled, diesel-fueled, alcohol-fueled, and natural gas-fueled automobiles, and for dual fuel automobiles operated on ga soline or diesel fuel, harmonically average the unrounded city and highway fuel economy valu es, determined in paragraphs (a)(1) or (2) of this section and (b)(1) or (2) of th is section, weighted 0. 55 and 0.45 respectively, and round to the nearest whole mpg. (An exampl e of this calculati on procedure appears in Appendix II of this part).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 283 of 339 (ii) For alcohol dual fuel and natural gas dua l fuel automobiles operated on the alternate fuel, harmonically average the unrounded c ity and highway values from the tests performed using the alternative fuel as determined in paragra phs (a)(3) and (b)(3) of this section, weighted 0.55 and 0.45 respectively, and round to the nearest whole mpg. (iii) For electric vehicles, calculate the combined fuel economy, in miles per kW-hr and miles per gasoline gallon equivalent, by harm onically averaging th e unrounded city and highway values, weighted 0.55 and 0.45 respectively. Round miles per kW-hr to the nearest 0.001 and round miles per gallon gaso line equivalent to the nearest whole number. (iv) For plug-in hybrid electric vehicles, calcu late a combined fuel economy value, in miles per gasoline gallon equivalent as follows: (A) Determine city and highway fuel econom y values for vehicle operation after the battery has been fully discharged (“gas only operation” or “charge-sustaining mode”) as described in paragraphs (a) a nd (b) of this section. (B) Determine city and highway fuel economy values for vehicle op eration starting with a full battery charge (“all-el ectric operation” or “gas pl us electric operation”, as appropriate, or “charge-depleting mode”) as described in § 600.116-12. For battery energy, convert W-hour/mile results to miles pe r gasoline gallon equivalent or miles per diesel gallon equivalent, as applicable. Note that you must also convert battery-based fuel economy values to miles per kW-hr for calcu lating annual fuel cost as described in §
600.311-12. (C) Calculate a composite city fuel ec onomy value and a composite highway fuel economy value by combining the separate results for battery and engine operation usingFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 284 of 339 the procedures described in § 600.116-12). A pply the derived 5-cycle adjustment to these composite values. Use these values to calculate the vehicle’s combined fuel economy as described in paragra ph (c)(1)(i) of this section. (2) For the purposes of ca lculating the combined CO 2 emissions value for a model type, to be used in displaying on the label under subpa rt D of this part, th e manufacturer shall: (i) For gasoline-fueled, diesel-fueled, alcohol-fueled, and natural gas-fueled automobiles, and for dual fuel automobiles operated on gaso line or diesel fuel, arithmetically average the unrounded city and highway values, determined in paragr aphs (a)(1) or (2) of this section and (b)(1) or (2) of this section, weighted 0.55 and 0.45 respectively, and round to the nearest whole gram per mile; or (ii) For alcohol dual fuel and natural gas dua l fuel automobiles operated on the alternate fuel, arithmetically average th e unrounded city and highway CO 2 emission values from the tests performed using the alternative fuel as determin ed in paragraphs (a)(3) and (b)(3) of this section, wei ghted 0.55 and 0.45 respectively, an d round to the nearest whole gram per mile. (iii) CO 2 label information is based on tailpipe emissions only, so CO 2 emissions from electric vehicles are assumed to be zero. (iv) For plug-in hybrid electric vehicles, calculate combined CO 2 emissions as follows: (A) Determine city and highway CO 2 emission rates for vehicle operation after the battery has been fully discharged (“gas only operation” or “charge-sustaining mode”) as described in paragraphs (a) and (b) of this section. (B) Determine city and highway CO 2 emission rates for vehicle operation starting with a full battery charge (“all-electric operati on” or “gas plus electric operation”, asFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 285 of 339 appropriate, or “charge-depleting mode”) as described in § 600.116-12. Note that CO 2 label information is based on tailpipe emissions only, so CO 2 emissions from electric vehicles are assumed to be zero. (C) Calculate a composite city CO 2 emission rate and a composite CO 2 emission rate by combining the separate results for battery and engine operation using the procedures described in § 600.116-12. Use these values to calculate the vehicle’s combined fuel economy as described in paragra ph (c)(1)(i) of this section. (d) Calculating combined fuel economy and CO 2 emissions. (1) If the criteria in § 600.115–11(a) are met for a model type, both th e city and highway fuel economy and
CO 2 emissions values must be determined us ing the vehicle-specific 5-cycle method. If the criteria in § 600.115–11(b) ar e met for a model type, th e city fuel economy and CO 2 emissions values may be determined using either method, but the highway fuel economy and CO 2 emissions values must be determined using the vehicle-specific 5-cycle method (or modified 5-cycle method as allowed under § 600.114–12(b)(2)). (2) If the criteria in § 60 0.115 are not met for a model type , the city and highway fuel economy and CO 2 emission label values must be determined by using the same method, either the derived 5-cycle or vehicle-specific 5-cycle. (3) Manufacturers may use any of the followi ng methods for determining 5-cycle values for fuel economy and CO 2 emissions for electric vehicles: (i) Generate 5-cycle data as described in paragraph (a)(1) of this section. (ii) Decrease fuel economy values by 30 percent and increase CO 2 emission values by 30 percent relative to data gene rated from 2-cycle testing.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 286 of 339 (iii) Manufacturers may ask the Administrator to approve adjustment factors for deriving 5-cycle fuel economy results from 2-cycle test data based on operating data from their inuse vehicles. Such data should be collected from multiple vehicles with different drivers over a range of representative driving rout es and conditions. The Administrator may approve such an adjustment factor for any of the manufacturer’s ve hicle models that are properly represented by the collected data. (e) Fuel economy values and other informa tion for advanced technology vehicles. (1) The Administrator may prescribe an alternative method of determ ining the city and highway model type fuel economy and CO 2 emission values for general, unique or specific fuel economy labels other than those set forth in this subpart C for advanced technology vehicles including, but not limited to battery electric vehicles, fuel cell vehicles, hybrid electric vehicles using hydraulic energy st orage, and vehicles equipped with hydrogen internal combustion engines. (2) For advanced technology vehicles, the Ad ministrator may prescribe special methods for determining information other than fuel ec onomy that is required to be displayed on fuel economy labels as specified in § 600.302-12(e). (f) Sample calculations . An example of the calculation re quired in this subpart is in Appendix III of this part.

Subpart D—Fuel Economy Labeling

44. The heading for subpart D is revised as set forth above.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 287 of 339 § 600.301
‐ 08, § 600.301
‐ 12, § 600.301
‐ 86, § 600.301
‐ 95, § 600.302
‐ 77, § 600.303
‐ 77, §

600.304
‐ 77, § 600.305
‐ 77, § 600.306
‐ 86, § 600.307
‐ 86, § 600.307
‐ 95, § 600.310
‐ 86, §

600.311
‐ 86, § 600.313
‐ 86, § 600.314
‐ 01, § 600.314
‐ 86, § 600.315
‐ 82—[Removed]

45. Subpart D is am ended by rem oving the following sections: § 600.301-08 § 600.301-12 § 600.301-86 § 600.301-95 § 600.302-77 § 600.303-77 § 600.304-77 § 600.305-77 § 600.306-86 § 600.307-86 § 600.307-95 § 600.310-86 § 600.311-86 § 600.313-86 § 600.314-01 § 600.314-86 § 600.315-82Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 288 of 339 46. Redesignate specific sections in subpart D as follows: 

### old section new section 600.30 6

‐ 08 600.301

‐ 08 600.30 7

‐ 08 600.302

‐ 08 600.312

‐ 8 6 600.312

‐ 08 600.313

‐ 01 600.313

‐ 08 600.31 6

‐ 78 600.31 6

‐ 08

47. The redesignated § 600.301-08 is revised to read as follows: § 600.301
‐ 08 Labeling requireme nts. (a) Prior to being offered for sale, each manufacturer shall affix or cause to be affixed and each dealer shall maintain or cause to be maintained on each automobile: (1) A general fuel economy label (initial, or updated as required in § 600.314) as described in § 600.303 or: (2) A specific label, for those automobiles ma nufactured or imported before the date that occurs 15 days after general labels have been determined by the manufacturer, as described in § 600.210–08(b) or § 600.210–12(b). (i) If the manufacturer elects to use a specific label within a model type (as defined in § 600.002, he shall also affix specific labels on all automobiles within this model type, except on those automobiles manufactured or im ported before the date that labels are required to bear range values as required by pa ragraph (b) of this section, or determined by the Administrator, or as permitted under § 600.310. (ii) If a manufacturer elects to change from general to specific labels or vice versa within a model type, the manufacturer shall, within fi ve calendar days, initia te or discontinue asFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 289 of 339 applicable, the use of specific labels on all ve hicles within a model type at all facilities where labels are affixed. (3) For any vehicle for which a specific label is requested which has a combined FTP/HFET-based fuel economy value, as determined in § 600.513, at or below the minimum tax-free value, the following statement must appear on the specific label: “[Manufacturer's name] may have to pay IRS a Gas Guzzler Tax on this vehicle because of the low fuel economy.” (4)(i) At the time a general fuel economy value is determined for a model type, a manufacturer shall, except as provided in paragraph (a)(4)(ii) of this section, relabel, or cause to be relabeled, vehicles which: (A) Have not been delivered to the ultimate purchaser, and (B) Have a combined FTP/HFET-based model type fuel economy value (as determined in § 600.208–08(b) or § 600.208-12(b) of 0.1 mpg or more below the lowest fuel economy value at which a Gas Guzzler Tax of $0 is to be assessed. (ii) The manufacturer has the option of re-labeling vehicles during the first five working days after the general label value is known. (iii) For those vehicle model types which have been issued a specific label and are subsequently found to have tax liability, th e manufacturer is responsible for the tax liability regardless of whether the vehicle has been sold or not or whether the vehicle has been relabeled or not. (b) Fuel economy range of comparable vehicles. The manufacturer shall include the current range of fuel economy of compar able automobiles (as described in §§ 600.311Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 290 of 339 and 600.314) in the label of each vehicle manufactured or imported more than 15 calendar days after the current range is made available by the Administrator. (1) Automobiles manufactured or imported before a date 16 or more calendar days after the initial label rang e is made available under § 600.311 shall include the range from the previous model year. (2) Automobiles manufactured or imported mo re than 15 calendar da ys after the label range is made available under § 600.311 shall be labeled with the current range of fuel economy of comparable automobiles as approved for that label. (c) The fuel economy label must be readily vi sible from the exterior of the automobile and remain affixed until the time the automobile is delivered to the ultimate consumer. (1) It is preferable that the fuel economy label information be incorporated into the Automobile Information Disclosure Act la bel, provided that the prominence and legibility of the fuel economy label is maintained. For this purpose, all fuel economy label information must be placed on a separa te section in the Automobile Information Disclosure Act label and may not be intermix ed with that label information, except for vehicle descriptions as noted in § 600.303–08(d)(1). (2) The fuel economy label must be located on a side window. If the window is not large enough to contain both the Automobile Inform ation Disclosure Act label and the fuel economy label, the manufacturer shall have the fuel economy label affixed on another window and as close as possible to the Auto mobile Information Disclosure Act label. (3) The manufacturer shall have the fuel ec onomy label affixed in such a manner that appearance and legibility are maintained until af ter the vehicle is delivered to the ultimate

consumer.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 291 of 339 § 600.302-08—[Revised]
48. The redesignated § 600.302-08 is amended by removing and reserving paragraphs (h) through (j).

49. A new § 600.302-12 is added to su bpart E to read as follows: 

### [NOTE: EPA is including two separate label formats in this proposal. The label format shown in Appendix VI is described in the following § 600.302

‐ 12. The

second label format is shown in Appendix VII but is not described separately. The

data items specified in § 600.311

‐ 12(e)(2), (i)(3)(ii), and (k) are depi cted only in

the second label format. We expect to adopt a single label format for the final

rule. The final label may include all the data items specified in § 600.311

‐ 12, regardless of the way they are shown in Appendix VI and Appendix VII.]

§ 600.302
‐ 12 Fuel economy label—general provisions. This section describes labeling requirements and specifications that apply to all vehicles. The requirements and specifications in this section and those in §§ 600.304 through 600.310 are illustrated in Appendix VI of this part. Manufacturers must make a good faith effort to conform to the formats illustrated in Appendix VI of this part. Label templates are available for download at website.here. (a) Basic format . Fuel economy labels must be r ectangular in shape with a minimum height of 178 mm and a minimum width of 114 mm. Fuel economy labels must be printed on white or very light paper with the co lors specified in Appendix VI of this part;Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 292 of 339 any label markings for which colors are not specified must be in black and white. The required label can be divided into six separate fields outlined by a continuous border, as described in paragraphs (b) through (g) of this section. (b) Border . Use a thin line to create an outline border for the label. (c) Fuel economy grade . Include the following elements in the uppermost portion of the label: (1) At the top left portion of the field, in clude “EPA” and “DOT” with a horizontal line inbetween (“EPA divided by DOT”). To the right of these characters, place a thin vertical line. (2) At the top right porti on of the field, include the heading “Fuel Economy and Environmental Comparison”. (3) Below the heading, include a large circ le containing the appr opriate letter grade characterizing the vehicle’s fuel economy, as described in § 600.311-12. (4) Include the following statement below the le tter grade: The above grade reflects fuel economy and greenhouse gases. Gradi ng system ranges from A+ to D. (5) Manufacturers may optionally include an additional item to allow for accessing interactive information with m obile electronic devices. To do this, include an image of a QR code that will direct mobile electroni c devices to a website with fuel economy information that is specific to the vehicl e or, if this website is unavailable, to http://fueleconomy.gov/m/ . Generate the QR code as specified in ISO/IEC 18004:2006 (incorporated by reference in § 600.011). Above the QR code, include the caption “Smartphone”.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 293 of 339 (d) Website . In the field directly below the fu el economy grade, include the following website reference: “website.here”. (e) Fuel savings . Include one of the following statemen ts in the field directly below the website reference: (1) For vehicles with calculated fuel savings re lative to the average ve hicle as specified in § 600.311-12: “Over five years, this vehicle saves $ x in fuel costs compared to the average vehicle.” Complete the statement by including the calculated fuel savings as specified in § 600.311-12. (2) For vehicles with calculated fuel costs high er than the average vehicle as specified in § 600.311-12: “Over five years, you will spend $ x more in fuel costs compared to the average vehicle.” Complete the statement by including the calculated increase in fuel costs as specified in § 600.311-12. (3) For vehicles with calculated fuel cost s no different than the average vehicle as specified in § 600.311-12: “Your fu el cost will be the same as that estimated for the average vehicle.” (f) Fuel economy and consumption data . Include the following elements in the field directly below the fuel savings statement: (1) Identify the vehicle’s fuel t ype in a header bar as follows: (i) For vehicles designed to operate on a single fuel, identify the appropriate fuel. For example, identify the vehicle as “Gasoline Vehicle”, “Diesel Vehi cle”, “Ethanol (E85) Vehicle”, “Compressed Natural Ga s Vehicle”, etc. This incl udes hybrid electric vehicles that do not have plug-in capability. Include a fuel pump logo to the left of thisFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 294 of 339 designation. For natural gas vehicles, use the fuel pump logo appropriate for natural gas and add a “CNG” logo. (ii) Identify flexible-fuel ve hicles and dual-fuel vehicles as “Dual Fuel Vehicle (Gasoline& Natural Gas)”, “Dual Fuel Vehicle: (Diesel & Ethanol E85) ”, etc. Include a fuel pump logo to the left of this designati on. Also include a CNG logo, as appropriate. (iii) Identify plug-in hybrid electric vehicles as “Dual Fu el Vehicle: Plug-in Hybrid Electric”. Include a fuel pump logo to the left of this desi gnation and an electric plug logo to the right of this designation. (iv) Identify electric vehicles as “Electric Vehicle”. Includ e an electric plug logo to the left of this designation. (2) Create a table below the header bar as desc ribed in this paragra ph (f)(2) for vehicles that run on gasoline or diesel fuel w ith no plug-in capability. See §§ 600.306 through 600.310 for specifications that apply for other vehi cles. Create the table with five data values in the following sequence of columns: (i) Below the heading “Gallons/100 Miles”, include the value for the fuel consumption rate as described in § 600.311-12. (ii) Below the heading “MPG City”, include the value for the city fuel economy as described in § 600.311-12. For dual-fuel vehicles and flexible-fuel vehicles, include the heading “Gasoline MPG City” or “D iesel MPG City”, as appropriate. (iii) Below the heading “MPG Highway”, include the value for the highway fuel economy as described in § 600.311-12. For dual-fuel vehicles and flexible-fuel vehicles, include the heading “Gasoline MPG Hi ghway” or “Diesel MPG Highway”, as appropriate.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 295 of 339 (iv) Below the heading “CO 2 g/mile (tailpipe only)”, include the value for the CO 2 emission rate as described in § 600.311-12. (v) Below the heading “Annual fuel cost”, incl ude the value for the a nnual fuel cost as described in § 600.311-12. (3) Include scale bars directly belo w the table of values as follows: (i) Create a scale bar in the le ft portion of the field to characterize the vehicle’s combined city and highway fuel economy relative to th e range of combined fuel economy values for all vehicles. Position a box with a dow nward-pointing arrow above the scale bar positioned to show where that vehicle's combin ed fuel economy falls relative to the total range. Include the vehicle’s combined fuel economy (as described in § 600. 210–12(c)) inside the box. Include the number representi ng the value at the lo w end of the MPG or MPGe range and the term “Worst” inside the bo rder at the left end of the scale bar. Include the number representing the value at the high end of the MPG or MPGe range and the term “Best” inside the border at the right end of the scale bar. EPA will periodically calculate an d publish updated range valu es as described in § 600.311. Include the expression “Combined MPG e” directly below the scale bar. (ii) Create a scale bar in the middle portion of the field to charact erize the vehicle’s CO 2 emission rate relative to the range of CO 2 emission rates for all vehicles. Position a box with a downward-pointing arrow above the sc ale bar positioned to show where that vehicle's CO 2 emission rate falls relative to the total range. Include the vehicle’s CO 2 emission rate (as described in § 600. 210–12(c )) inside the box. Include the number representing the value at the high end of the CO 2 emission range and the term “Worst” inside the border at the left end of the scale bar. Incl ude the number representing theFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 296 of 339 value at the low end of the CO 2 emission range and the term “Best” inside the border at the right end of the scale bar. EPA will pe riodically calculate and publish updated range values as described in § 600.311. Include the expression “CO 2 g/mile” directly below the scale bar. (iii) Create a scale bar in the right portion of the field to char acterize the vehi cle’s level of emission control for other air pollutants relati ve to that of all ve hicles. Position a box with a downward-pointing arrow above the sc ale bar positioned to show where that vehicle's emission rating falls relative to th e total range. Include the vehicle’s emission rating (as described in § 600. 311-12) inside the box. Include “1 Worst” in the border at the left end of the scale bar and include “10 Best” in the bor der at the right end of the scale bar. EPA will periodical ly calculate and publish update d range values as described in § 600.311. Include the expression “Other Air Po llutants” directly below the scale bar. (4) Below the scale bars, include two statements as follows: (i) Include one of the following statements to identify the range of MPG values, which EPA will periodically calculate and publish as described in § 600.311: (A) For dedicated gasoline or diesel vehicles: “Fuel ec onomy for all [mid-size cars, SUVs, etc., as applicable] ranges from x to y MPG.” (B) For dual-fuel vehicles and flexible-fue l vehicles: “Fuel economy for all [mid-size cars, SUVs, etc., as applicable] ranges from x to y MPGequivalent. Ratings are based on [GASOLINE or DIESEL FUEL] and do not re flect performance and ratings using [ALTERNATE FUEL]. See th e Fuel Economy Guide or website.here for more information.”Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 297 of 339 (ii) Include the following additional st atement: “Annual fuel cost is based on x miles per year at $ y per gallon.” For the value of x , insert the annual mileage rate established by EPA. For the value of y , insert the estimated cost pe r gallon established by EPA for gasoline or diesel fuel. (g) Footer . Include the following elements in the lowest portion of the label: (1) In the left portion of the fi eld, include the statement: “Visit website.here to calculate estimates personalized for your driving, and to download the Fuel Economy Guide (also available at dealers).” (2) In the right portion of the field, include the logos for EPA, the Department of Transportation, and the Department of Energy. (h) Vehicle description. Where the fuel economy label is ph ysically incorporated with the Motor Vehicle Information and Cost Savings Ac t label, no further ve hicle description is needed. If the fuel economy label is separate from the Automobile Information Disclosure Act label, describe the vehicle in a location on the label that does not interfere with the other required information. In cases where the vehicle description may not easily fit on the label, the manufacturer may request Administrator approval of modifications to the label format to accommodate this information. Include the following items in the vehicle descripti on, if applicable: (1) Model year. (2) Vehicle car line. (3) Engine displacement, in cubic inches, c ubic centimeters, or liters whichever is consistent with the customary description of that engine. (4) Transmission class.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 298 of 339 (5) Other descriptive information, as necessar y, such as number of engine cylinders, to distinguish otherwise identical model types or, in the case of specific labels, vehicle configurations, as approv ed by the Administrator. (i) [Reserved] (j) Gas guzzler provisions . For vehicles requiring a tax statement under § 600.513, add the phrase “Gas Guzzler Tax” followed by th e dollar amount. The tax value required by this paragraph (j) is base d on the combined fuel economy value for the model type calculated according to § 600.513 and rounded to the nearest 0.1 mpg. (k) Alternative label provisi ons for special cases. The Administrator may approve modifications to the style guidelines if sp ace is limited. The Administrator may also prescribe special label format and informa tion requirements for vehicles that are not specifically described in this subpart, such as vehicles powered by fuel cells or hydrogenfueled engines, or hybrid electric vehicles that have engines operating on fuels other than gasoline or diesel fuel. The revised labeling specifications will conform to the principles established in this subpart, w ith any appropriate modifications or additions to reflect the vehicle’s unique characteristics. See 49 U.S.C. 32908(b)(1)(F). (l) Rounding . Unless the regulation specifies otherw ise, do not round intermediate values, but round final calculated values identified in this subpart to the nearest whole number. (m) Updating information . EPA will periodically publish updated information that is needed to comply with the labeling requirements in this subpart. This includes the annual mileage rates and fuel-cost information, th e “best and worst” values needed for calculating relative ratings for individual vehi cles, and the fuel-economy grade criteria as specified in § 600.311.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 299 of 339 50. A new § 600.306-12 is added to su bpart E to read as follows: § 600.306-12 Fuel economy label—special re quirements for natural gas vehicles. Fuel economy labels for dedicated natural gas vehicles must meet the specifications described in § 600.302, with th e following modifications: (a) Create a table with six data values in th e following sequence of columns instead of the table described in § 600.302-12(f)(2): (1) Below the heading “Range (miles)”, include the value for the vehicle’s driving range as described in § 600.311-12. (2) Below the heading “eGallons/100 Miles”, include the value for the fuel consumption rate as described in § 600.311-12. (3) Below the heading “MPGe City”, include the value for the city fuel economy as described in § 600.311-12. (4) Below the heading “MPGe Highway”, include the value for the highway fuel economy as described in § 600.311-12. (5) Below the heading “CO 2 g/mile (tailpipe only)”, include the value for the CO 2 emission rate as described in § 600.311-12. (6) Below the heading “Annual fuel cost”, incl ude the value for the a nnual fuel cost as described in § 600.311-12. (b) Include the following two statements inst ead of those specified in § 600.302-12(f)(4): (1) “Fuel economy for all [mid-size cars, SUVs, etc., as applicable] ranges from x to y MPGequivalent. MPGequivalent: 121.5 cubic fe et CNG = 1 gallon of gasoline energy.”Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 300 of 339 EPA will periodically calculate and publish upda ted values for completing this statement as described in § 600.311. (2) “Annual fuel cost is based on x miles per year at $ y per gasoline gallon equivalent.” EPA will periodically calculate and publish upda ted values for completing this statement as described in § 600.311.

51. A new § 600.308-12 is added to su bpart E to read as follows: § 600.308-12 Fuel economy label format requirements--plug-in hybrid electric vehicles. Fuel economy labels for plug-in hybrid elect ric vehicles must meet the specifications described in § 600.302, with the exceptions and additional specifications described in this section. This section describes how to label ve hicles that with gaso line engines. If the vehicle has a diesel engine, all the references to “gas” or “gasoline” in this section are understood to refer to “diesel” or “diesel fuel”, respectively. (a) Create a table with data values in the following sequence of columns instead of the table specified in § 600.302-12(f)(2): (1) If the vehicle’s engine st arts only after the battery is fully discharged, include the following heading statement: “All Electric (first x miles only)”. If the vehicle uses combined power from the battery and the engi ne before the battery is fully discharged, include the following heading statem ent: “Blended Electric + Gas (first x miles only)”. Complete the statement using the value of x to represent the distance the vehicle drives before the battery is fully discharged , as described in § 600.311-12. Include the following data items below this heading statement:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 301 of 339 (i) Below the heading “eGallons /100 miles”, include the value for the fuel consumption rate as described in § 600.311-12. (ii) Below the heading “Combined MPGe”, include the value for the combined fuel economy as described in § 600.311-12. (2) Include the following heading statement: “Gas only” and include the following items below this heading statement: (i) Below the heading “Gallons/100 miles”, include the value for the appropriate fuel consumption rate as described in § 600.311-12. (ii) Below the heading “Combined MPG”, incl ude the value for the appropriate combined fuel economy as described in § 600.311-12. (3) If the vehicle’s engine st arts only after the battery is fully discharged, include the following heading statement: “All-Electric and Gas-Only Combined”. If the vehicle uses combined power from the battery and the engi ne before the battery is fully discharged, include the following heading statement: “Ble nded and Gas-Only Combined”. Include the following data items below this heading statement: (i) Below the heading “CO 2 g/mile (tailpipe only)”, include the value for the CO 2 emission rate as described in § 600.311-12. (ii) Below the heading “Annual fuel cost”, incl ude the value for the a nnual fuel cost as described in § 600.311-12. (b) Include the following two statements inst ead of those specified in § 600.302-12(f)(4): (1) “Fuel economy for all [mid-size cars, SUVs, etc., as applicable] ranges from x to y MPGequivalent. MPGequivalent: 33.7 kW-hrs = 1 gallon gasoline energy.” EPA willFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 302 of 339 periodically calculate and publish updated values for completing this statement as described in § 600.311. (2) “Annual fuel cost is based on x miles per year at $ y per gallon and z cents per kW-hr.” EPA will periodically calculate and publish upda ted values for completing this statement as described in § 600.311.

52. A new § 600.310-12 is added to su bpart E to read as follows: § 600.310-12 Fuel economy label format requirements--electric vehicles. Fuel economy labels for electric vehicles must meet the specifications described in § 600.302, with the following exceptions and additional specifications: (a) Create a table with data values in the following sequence of columns instead of the table specified in § 600.302-12(f)(2): (1) Below the heading “Range (miles)”, include the value for the maximum estimated driving distance as described in § 600.311-12. (2) Below the heading “kW-hrs/100 Miles”, in clude the value for the fuel consumption rate as described in § 600.311-12. (3) Below the heading “MPGe City”, include the value for the city fuel economy as described in § 600.311-12. (4) Below the heading “MPGe Highway”, include the value for the highway fuel economy as described in § 600.311-12. (5) Below the heading “CO 2 g/mile (tailpipe only)”, include the number 0. (6) Below the heading “Annual fuel cost”, incl ude the value for the a nnual fuel cost as described in § 600.311-12.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 303 of 339 (b) Include the following two statements inst ead of those specified in § 600.302-12(f)(4): (1) “Fuel economy for all [mid-size cars, SUVs, etc., as applicable] ranges from x to y MPGequivalent. MPGequivalent: 33.7 kW-hrs = 1 gallon gasoline energy.” EPA will periodically calculate and publish updated values for completing this statement as described in § 600.311. (2) “Annual fuel cost is based on x miles per year at y cents per kW-hr.” EPA will periodically calculate and publish updated values for completing this statement as described in § 600.311.

53. A new § 600.311-12 is added to read as follows: § 600.311
‐ 12 Determination of values for fu el economy labels. (a) Fuel economy . Determine city and highway fuel economy values as described in § 600.210-12(a) and (b). Determine combined fuel economy values as described in § 600.210-12(c). Note that the labe l for plug-in hybrid electric vehicles requires separate values for combined fuel economy for vehicl e operation before and after the vehicle’s battery is fully discharged; we generally re fer to these modes as “Blended Electric+Gas” (or “Electric Only”, as a pplicable) and “Gas only”. (b) CO 2 emission rate . Determine the engine-related CO 2 emission rate as described in § 600.210-12(d). (c) Fuel economy grade . Determine a vehicle’s fuel economy grade as follows: (1) Determine the grade that applies based on combined CO 2 emission rates from paragraph (b) of this section according to the following table:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 304 of 339 Table 1 of § 600.311-12 — Criteria to Define Fuel Economy Grade

Combined CO 2 (g/mi) Grade 0-76 A+ 77-152 A153-229 A230-305 B+ 306-382 B383-458 B459-535 C+ 536-611 C612-688 C689-764 D+

765+ D (2) We may update the grading scale periodically based on the median CO 2 emission rate for all model types. We would do this by doubling the median value from a given model year to establish the nominal full range of CO 2 values, then dividing this full range into eleven equal intervals, after rounding to th e nearest whole number. For reference, the grade distribution in paragraph (c)(1) of this section is based on a median value of 421 g/mi CO 2 . (d) Fuel consumption rate . Calculate the fuel consumption rate as follows: (1) For vehicles with engines that are not plug-in hybrid electric ve hicles, calculate the fuel consumption rate in ga llons per 100 miles (or gasoline gallon equivalent per 100 miles for fuels other than gaso line or diesel fuel) with the following formula, rounded to the first decimal place: Fuel Consumption Rate = 100/MPG Where: MPG = The combined fuel economy value from paragraph (a) of this section.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 305 of 339 (2) For plug-in hybrid electric vehicles, calcula te two separate fuel consumption rates as follows: (i) Calculate the fuel consumption rate based on engine operation after the battery is fully discharged as described in para graph (d)(1) of th is section. (ii) Calculate the fuel consumption rate dur ing operation before the battery is fully discharged in gasoline gallon equivalent per 100 miles as described in SAE J1711 (incorporated by reference in § 600.011), as described in § 600.116. (3) For electric vehicles, calculate the fuel consumption rate in kW-hours per 100 miles with the following formula, rounde d to the nearest whole number: Fuel Consumption Rate = 100/MPG Where: MPG = The combined fuel economy value from pa ragraph (a) of this section, in miles per kW-hour. (e) Annual fuel cost . Calculate annual fuel costs as follows: (1) Calculate the total annual fuel cost with the following formula, rounded to nearest whole number: Annual Fuel Cost = [f 1 × Fuel Price 1 /MPG 1 + f 2 × Fuel Price 2 /MPG 2 ] × Average Annual Miles Where:
f i = The fraction of the vehicl e’s overall driving distance that is projected to occur for fuel i . For vehicles that ope rate on only one fuel, f 1 = 1 and f 2 = 0. For plug-in hybrid electric vehicles, determine the values of f i from SAE J 2841 (incor porated by referenceFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 306 of 339 in § 600.011). For dual fuel vehicles and flex ible fuel vehicles, disregard operation on the alternative fuel. Fuel Price i = The estimated fuel pri ce provided by EPA for fuel i . The units are dollars per gallon for gasoline and diesel fuel, dolla rs per gasoline gallon e quivalent for natural gas, and dollars per kW-hr for plug-in electricity.
MPG i = The combined fuel economy value from paragraph (a) of this section for fuel i

. The units are miles per gallon for gasoline a nd diesel fuel, miles per gasoline gallon equivalent for natural gas, and miles per kW-hr for plug-in electricity. Average Annual Miles = The estimated annual m ileage figure provided by EPA, in miles. (2) For plug-in hybrid electric vehicles, calculate a separate annual cost estimate using the equation in paragraph (e)(1) of this sec tion by assuming the battery is never charged from an external power source. Similarly, cal culate an annual cost estimate by assuming the battery is regularly charged from an external power source such that it is never fully discharged. (f) Fuel savings . Calculate an estimated five-year cost increment relative to an average vehicle by multiplying the rounded annual fuel co st from paragraph (e) of this section by 5 and subtracting this value from the median five-year fuel cost. We will calculate the median five-year fuel cost from the annual fu el cost equation in paragraph (e) of this section based on a gasoline-fueled vehicle with a median fuel economy value. The median five-year fuel cost is $10,000 for a 21-mpg vehicle that drives 15,000 miles per year with gasoline priced at $2.80 per gallon. We may periodically update this median five-year fuel cost to better characterize th e fuel economy for an average vehicle. RoundFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 307 of 339 the calculated five-year cost increment to the nearest $100. Negativ e values represent a cost increase compared to the average vehicle. (g) Other air pollutant score . Establish an score for exhaust emissions other than CO 2 based on the applicable emission standards as shown in Table 2 of this section. For Independent Commercial Importers that import vehicles not subject to Tier 2 emissions standards, the air pollutant score for the vehicle is 1.

Table 2 of § 600.311-12 —Criteria for Establishing Air Pollution Score Score U,S. EPA Tier 2 Emission Standard California Air Resources Board LEV II Emission Standard 1 — ULEV &LEV II large trucks 2 Bin 8 SULEV II large trucks 3 Bin 7 — 4 Bin 6 LEV II, option 1 5 Bin 5 LEV II 6 Bin 4 ULEV II 7 Bin 3 — 8 Bin 2 SULEV II 9 — PZEV 10 Bin 1 ZEV

(h) Ranges of fuel economy and CO 2 emission values . We will determine the range of combined fuel economy and CO 2 emission values for each ve hicle class identified in § 600.315. We will generally update these range valu es before the start of each model year based on the lowest and highest va lues within each vehicle class. We will also use this same information to establish a range of fuel economy values for all vehicles. Continue to use the most recently published numbers until we update them, even if you start a new model year before we publish the range values for the new model year. (i) Driving range . Determine the driving range for certain vehicles as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 308 of 339 (1) For electric vehicles, determine the vehi cle’s overall driving range as described in Section 8 of SAE J1634 (incorporated by re ference in § 600.011), as described in § 600.116. Determine separate range values for FTP-based city and HFET-based highway driving, then calculate a co mbined value by arithmetically averaging the two values, weighted 0.55 and 0.45 respectively, and round to the nearest whole number. (2) For natural gas vehicles, determine the vehicle’s driving range in miles by multiplying the combined fuel economy described in para graph (a) of this section by the vehicle’s fuel tank capacity, rounded to the nearest whole number. (3) For plug-in hybrid electric vehicles, dete rmine the battery driv ing range and overall driving range as described in SAE J1711 (incorporated by reference in § 600.011), as described in § 600.116, as follows: (i) Determine the vehicle’s Actual Charge-Depleting Range, R cda . Determine separate range values for FTP-based city and HFET- based highway driving, then calculate a combined value by arithmetically averagi ng the two values, weighted 0.55 and 0.45 respectively, and round to the nearest whole number. (ii) Use good engineering judgment to calcula te the vehicle’s opera ting distance before the fuel tank is empty when starting with a full fuel tank and a fully charged battery, consistent with the procedure and calculati on specified in paragraph (i)(3)(i) of this section and the fuel economy values as desc ribed in paragraph (a) of this section. (j) [Reserved] (k) Charge time . For electric vehicles, determine the time it takes to fully charge the battery from a standard 110 volt power source to the point that the battery meets the manufacturer’s end-of-charge criteria, consis tent with the procedures specified in SAEFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 309 of 339 J1634 (incorporated by referen ce in § 600.011) for electric ve hicles and in SAE J1711 (incorporated by reference in § 600.011) for plug-in hybrid elec tric vehicles, as described in § 600.116. This value may be more or le ss than the 12-hour minimum charging time specified for testing. You may alternativel y specify the charge time based on a 220 volt power source if your owners manual recomm ends charging with the higher voltage; you must then identify the voltage associated w ith the charge time on the fuel economy label. (l) California-specific values . If the Administrator determin es that automobiles intended for sale in California are likely to exhibit si gnificant differences in fuel economy or other label values from those intended for sale in other states, the Administrator will compute separate values for each class of automob iles for California and for the other states.

54. § 600.314-08 is revised to read as follows: § 600.314
‐ 08 Updating label values, annual fuel cost, Gas Guzzler Tax, and range of fuel econom y for comparable automobiles. (a) The label values establis hed in § 600.312 shall remain in effect for the model year unless updated in accordance with pa ragraph (b) of this section. (b)(1) The manufacturer shall recalculate the model type fuel economy values for any model type containing base levels affected by running changes specified in § 600.507. (2) For separate model types create d in § 600.209–08(a)(2) or § 600.209–12(a)(2), the manufacturer shall recalculate the model type values for any additi ons or deletions of subconfigurations to the model type. Mi nimum data requirements specified in § 600.010(c) shall be met prio r to recalculation. (3) Label value recalculations sh all be performed as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 310 of 339 (i) The manufacturer shall use updated total model year proj ected sales for label value recalculations. (ii) All model year data approved by the Admi nistrator at the time of the recalculation for that model type shall be in cluded in the recalculation. (iii) Using the additional data under paragraph (b) of this section, the manufacturer shall calculate new model type city and highway values in accordance with § 600.210 except that the values shall be r ounded to the nearest 0.1 mpg. (iv) The existing label values , calculated in accordance with § 600.210, shall be rounded to the nearest 0.1 mpg. (4)(i) If the recalculated city or highway fu el economy value in paragraph (b)(3)(iii) of this section is less than the respective city or highway value in paragraph (b)(3)(iv) of this section by 1.0 mpg or more, the manufacturer shall affix labels with the recalculated model type values (rounded to the nearest whole mpg) to all new vehicles of that model type beginning on the day of implementation of the running change. (ii) If the recalculated city or highway fuel economy value in paragraph (b)(3)( iii) of this section is higher than the respective city or highway value in paragraph (b)(3)(iv) of this section by 1.0 mpg or more, th en the manufacturer has the op tion to use the recalculated values for labeling the entire model type be ginning on the day of implementation of the running change. (c) For fuel economy labels updated using reca lculated fuel economy values determined in accordance with paragraph (b) of this se ction, the manufacturer shall concurrently update all other label information (e.g., the annua l fuel cost, range of comparable vehicles and the applicability of the Gas Guzzler Tax as needed).Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 311 of 339 (d) The Administrator shall periodically update the range of fuel economies of comparable automobiles based upon all labe l data supplied to the Administrator. (e) The manufacturer may request permission fr om the Administrator to calculate and use label values based on test data from vehicles which have not completed the Administrator-ordered confirmatory testi ng required under the provisions of § 600.008– 08(b). If the Administrator approves such a ca lculation the following procedures shall be used to determine if relabeling is required after the confirmatory testing is completed. (1) The Administrator-ordered confirmatory testing shall be completed as quickly as possible. (2) Using the additional data under paragraph (e)(1) of this sec tion, the manufacturer shall calculate new model t ype city and highway values in accordance with §§ 600.207 and 600.210 except that the values shall be rounded to th e nearest 0.1 mpg. (3) The existing label values, calculated in accordance with § 600.210, shall be rounded to the nearest 0.1 mpg. (4) The manufacturer may need to revise fuel economy labels as follows: (i) If the recalculated city or highway fuel economy value in paragra ph (b)(3)(iii) of this section is less than the resp ective city or highway value in paragraph (b)(3)(iv) of this section by 0.5 mpg or more, the manufacturer shall affix labels with the recalculated model type MPG values (rounded to the near est whole number) to al l new vehicles of that model type beginning 15 days after the completion of the confirmatory test. (ii) If both the recalculated city or highway fuel economy value in pa ragraph (b)(3)(iii) of this section is less than the respective city or highway value in paragraph (b)(3)(iv) of this section by 0.1 mpg or more and the recalculate d gas guzzler tax rate determined under theFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 312 of 339 provisions of § 600.513–08 is larger, the manuf acturer shall affix labels with the recalculated model type values and gas guzzler tax statement and rates to all new vehicles of that model type beginning 15 days afte r the completion of the confirmatory test. (5) For fuel economy labels updated using reca lculated fuel economy values determined in accordance with paragraph (e)(4) of this section, the manufacture r shall concurrently update all other label information (e.g., the annua l fuel cost, range of comparable vehicles and the applicability of the Gas Guzzler Tax if required by Department of Treasury regulations).

55. Section 600.315-08 is amended by revising para graphs (a)(2) and (c ) introductory text to read as follows: § 600.315
‐ 08 Classes of comparable automobiles. (a) * * * (2) The Administrator will classify light trucks (nonpassenger automobiles) into the following classes: Small pickup trucks, sta ndard pickup trucks, vans, minivans, and SUVs. Starting in the 2012 model year, SUVs will be divided between small sport utility vehicles and standard sport ut ility vehicles. Pickup trucks and SUVs are separated by car line on the basis of gross vehicle weight ra ting (GVWR). For a product line with more than one GVWR, establish the character istic GVWR value for the product line by calculating the arithmetic average of all distin ct GVWR values less th an or equal to 8,500 pounds available for that product line. The Ad ministrator may determ ine that specific light trucks should be most appropriately pl aced in a different class or in the special purpose vehicle class as provided in paragraph (a)(3)(i) and (ii) of this section, based onFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 313 of 339 the features and characteristic s of the specific vehicle, c onsumer information provided by the manufacturer, and other inform ation available to consumers. (i) Small pickup trucks. Pickup tr ucks with a GVWR below 6000 pounds. (ii) Standard pickup trucks. Pickup trucks with a GVWR at or above 6000 pounds and at or below 8,500 pounds. (iii) Vans. (iv) Minivans. (v) Small sport utility vehicles. Sport util ity vehicles with a GVWR below 6000 pounds. (vi) Standard sport utility vehicles. Sport ut ility vehicles with a GVWR at or above 6000 pounds and at or below 10,000 pounds.
* * * * * (c) All interior and cargo dimensions are meas ured in inches to the nearest 0.1 inch. All dimensions and volumes shall be determined fr om the base vehicles of each body style in each car line, and do not include optional e quipment. The dimensions H61, W3, W5, L34, H63, W4, W6, L51, H 201, L205, L210, L211, H198, W201, and volume V1 are to be determined in accordance with the proced ures outlined in Motor Vehicle Dimensions SAE J1100a (incorporated by referen ce in § 600.011), except as follows:
* * * * *

56. The redesignated § 600.316-08 is re vised to read as follows: § 600.316
‐ 08 Multistage manufact ure.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 314 of 339 Where more than one person is the manuf acturer of a vehicle, the final stage manufacturer (as defined in 49 CFR 529.3) is treated as th e vehicle manufacturer for purposes of compliance with this subpart.

Subpart E—Dealer Availability of Fuel Economy Inf ormation

57. The heading for subpart E is revised as set forth above. § 600.401
‐ 77, § 600.402
‐ 77, § 600.403
‐ 77, § 600.404
‐ 77, § 600.405
‐ 77, § 600.406
‐ 77, §

600.407
‐ 77—[Removed]

58. Subpart E is am ended by rem oving the following sections: § 600.401-77 § 600.402-77 § 600.403-77 § 600.404-77 § 600.405-77 § 600.406-77 § 600.407-77

Subpart F—Procedures for De termining Manufacturer's Average Fuel Economy and Manufacturer’s Average Carbon

‐ related Exhaust Emissions

59. The heading for subpart F is revised as set forth above.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 315 of 339 § 600.501
‐ 12, § 600.501
‐ 85, § 600.501
‐ 86, § 600.501
‐ 93, § 600.503
‐ 78, § 600.504
‐ 78, §

600.505
‐ 78, § 600.507
‐ 86, § 600.510
‐ 86, § 600.510
‐ 93, § 600.512
‐ 01, § 600.512
‐ 86, §

600.513
‐ 81, § 600.513
‐ 91—[Remo ved]

60. Subpart F is amended by rem oving the following sections: § 600.501-12 § 600.501-85 § 600.501-86 § 600.501-93 § 600.503-78 § 600.504-78 § 600.505-78 § 600.507-86 § 600.510-86 § 600.510-93 § 600.512-01 § 600.512-86 § 600.513-81 § 600.513-91

61. Redesignate § 600.502-81 as § 600.502.

62. The redesignated § 600.502 is re vised to read as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 316 of 339 § 600.502 Definitions. The following definitio ns apply to this s ubpart in addition to those in § 600.002: (a) The Declared value of imported components shall be: (1) The value at which components are decl ared by the importer to the U.S. Customs Service at the date of entry into the cu stoms territory of the United States; or (2) With respect to imports into Canada, the de clared value of such components as if they were declared as imports into the United St ates at the date of entry into Canada; or (3) With respect to imports into Mexico, the d eclared value of such components as if they were declared as imports into the United States at the date of entry into Mexico. (b) Cost of production of a car line shall mean the aggregate of the products of: (1) The average U.S. dealer wholesale pric e for such car line as computed from each official dealer price list effective during the course of a model year, and (2) The number of automobiles within the ca r line produced during the part of the model year that the price list was in effect. (c) Equivalent petroleum-based fuel economy value means a number representing the average number of miles traveled by an electric vehicle per gallon of gasoline.

63. § 600.507-12 is amended by revising paragra ph (a) introductory te xt and paragraph (c) to read as follows: § 600.507
‐ 12 Running change data requireme nts. (a) Except as specified in paragraph (d) of this section, the manufacturer shall submit additional running change fuel economy and carbon-related exhaust emissions data asFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 317 of 339 specified in paragraph (b) of this se ction for any running change approved or implemented under § 86.1842 of this chapter, which:
* * * * * (c) The manufacturer shall submit the fuel econo my data required by this section to the Administrator in ac cordance with § 600.314.
* * * * *

64. Redesignate § 600.509-86 as § 600.509-08.

65. § 600.510-12 is amended by revising paragrap hs (b)(2) introduc tory text, (b)(3) introductory text, (c)(2)(iv)(B), (g)(1), (i) introductory text, (j)(2) to read as follows: § 600.510
‐ 12 Calculation of average fue l economy and average carbon

‐ related

exhaust emissions.

* * * * * (b) * * * (2) The combined city/highway fuel economy and carbon-related exhaust emission values will be calculated for each model type in accordance with § 600.208 except that:
* * * * * (3) The fuel economy and carbon-related e xhaust emission values for each vehicle configuration are the comb ined fuel economy and carbon-related exhaust emissions calculated according to § 600.206–12(a)(3) except that:
* * * * * (c) * * *Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 318 of 339 (2) * * * (iv) * * * (B) The combined model type fuel economy value for operation on alcohol fuel as determined in § 600.208-12(b)(5)(ii) divide d by 0.15 provided the requirements of paragraph (g) of this section are met; or
* * * * * (g)(1) Alcohol dual fuel automobiles and natu ral gas dual fuel automobiles must provide equal or greaterr energy efficiency while ope rating on alcohol or natural gas as while operating on gasoline or diesel fuel to obtain the CAFE credit determined in paragraphs (c)(2)(iv) and (v) of th is section or to obtain the car bon-related exhaust emissions credit determined in paragraphs (j)(2)(ii) and (iii ) of this section. The following equation must hold true:

E alt /E pet > 1

Where:

E alt = [FE alt /(NHV alt × D alt )] × 10 6 = energy efficiency while operating on alternative fuel rounded to the nearest 0.01 miles/million BTU.

E pet = [FE pet /(NHV pet × D pet )] × 10 6 = energy efficiency while operatin g on gasoline or diesel (petroleum) fuel rounded to the nearest 0.01 miles/million BTU.

FE alt is the fuel economy [miles/gallon for liquid fuels or miles/100 standard cubic feet for gaseous fuels] while operated on the alternative fuel as determined in § 600.113–12(a) and (b).

FE pet is the fuel economy [miles/gallon] wh ile operated on petroleum fuel (g asoline or diesel) as determined in § 600.113-12(a) and (b).

NHV alt is the net (lower) heating value [BTU/lb] of the alternative fuel.

NHV pet is the net (lower) heating value [BTU/lb] of the petroleum fuel.

D alt is the density [lb/gallon for liquid fuels or lb/100 standard cubic feet for gaseous fuels] of the alternative fuel.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 319 of 339 D pet is the density [lb/gallon] of the petroleum fuel. (i) The equation must hold true for both th e FTP city and HFET highway fuel economy values for each test of each test vehicle. (ii)(A) The net heating value for alcohol fuels shall be premeasured using a test method which has been approved in a dvance by the Administrator. (B) The density for alcohol fuels sha ll be premeasured using ASTM D 1298–99 (incorporated by reference at § 600.011). (iii) The net heating value and density of gasoline are to be determined by the ma nufacturer in accordance with § 600.113.
* * * * * (i) For model years 2012 through 2015, and for ea ch category of automobile identified in paragraph (a)(1) of this sec tion, the maximum decrease in average carbon-related exhaust emissions determined in paragraph (j) of this section attributable to alcohol dual fuel automobiles and natural gas dual fuel automob iles shall be calculated using the following formula, and rounded to the nearest tenth of a gram per mile:

Maximum Decrease = 

### FltAvg MPG FltAvg MAX 

### − ⎥ ⎦ ⎤ ⎢ ⎣ ⎡

− 8887 8887

Where: FltAvg = The fleet average CREE value in grams per mile, rounded to the nearest whole number, for passenger automobiles or light trucks determined for the applicable model year according to paragr aph (j) of this section, excep t by assuming all alcohol dual fuel and natural gas dual fuel automobiles are operated exclusively on gasoline (or diesel) fuel.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 320 of 339 MPG MAX = The maximum increase in miles per gallon determined for the appropriate model year in para graph (h) of this section.
* * * * * (j) * * * (2) A sum of terms, each of which corresponds to a model type within that category of automobiles and is a product determined by multiplying the number of automobiles of that model type produced by the manufacturer in the model year by: (i) For gasoline-fueled and diesel-fueled model types, the carbon-related exhaust emissions value calculated for th at model type in accordance with paragraph (b)(2) of this section; or (ii)(A) For alcohol-fueled model types, fo r model years 2012 through 2015, the carbonrelated exhaust emissions value calculated for that model type in accordance with paragraph (b)(2) of this sec tion multiplied by 0.15 and rounded to the nearest gram per mile, except that manufacturers complyi ng with the fleet averaging option for N 2 O and
CH 4 as allowed under § 86.1818 of this chapter mu st perform this calculation such that

N 2 O and CH 4 values are not multiplied by 0.15; or (B) For alcohol-fueled model types, for model years 2016 an d later, the carbon-related exhaust emissions value calculated for that model type in accordance with paragraph (b)(2) of this section; or (iii)(A) For natural gas-fueled model types, for model years 2012 through 2015, the carbon-related exhaust emissions value calculate d for that model type in accordance with paragraph (b)(2) of this sec tion multiplied by 0.15 and rounded to the nearest gram per mile, except that manufacturers complyi ng with the fleet averaging option for N 2 O andFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 321 of 339 CH 4 as allowed under § 86.1818 of this chapter mu st perform this calculation such that

N 2 O and CH 4 values are not multiplied by 0.15; or (B) For natural gas-fueled model types, for model years 2016 and later, the carbonrelated exhaust emissions value calculated for that model type in accordance with paragraph (b)(2) of this section; or (iv) For alcohol dual fuel model types, for model years 2012 through 2015, the arithmetic average of the following two terms, the resu lt rounded to the nearest gram per mile: (A) The combined model type carbon-relate d exhaust emissions value for operation on gasoline or diesel fuel as dete rmined in § 600.208-12(b)(5)(i); and (B) The combined model type carbon-relate d exhaust emissions value for operation on alcohol fuel as determined in § 600.208- 12(b)(5)(ii) multiplied by 0.15 provided the requirements of paragraph (g) of this sect ion are met, except that manufacturers complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter must perform this calculation such that N 2 O and CH 4 values are not multiplied by 0.15; or (v) For natural gas dual fuel model type s, for model years 2012 through 2015, the arithmetic average of the following two terms; the result rounded to the nearest gram per mile: (A) The combined model type carbon-relate d exhaust emissions value for operation on gasoline or diesel as determined in § 600.208-12(b)(5)(i); and (B) The combined model type carbon-relate d exhaust emissions value for operation on natural gas as determined in § 600.208-12(b)(5)(ii) multiplied by 0.15 provided the requirements of paragraph (g) of this sect ion are met, except that manufacturersFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 322 of 339 complying with the fleet averaging option for N 2 O and CH 4 as allowed under § 86.1818 of this chapter must perform this calculation such that N 2 O and CH 4 values are not multiplied by 0.15. (vi) For alcohol dual fuel model types, fo r model years 2016 and later, the combined model type carbon-related exhaus t emissions value determined according to the following formula and rounded to the nearest gram per mile: CREE = (F × CREE alt ) + ( (1-F) × CREE gas ) Where: F = 0.00 unless otherwise approved by the Admi nistrator according to the provisions of paragraph (k) of this section;
CREE alt = The combined model type carbon-related exhaust emissions value for operation on alcohol fuel as dete rmined in § 600.208-12(b)(5)(ii); and
CREE gas = The combined model type carbon-re lated exhaust emissions value for operation on gasoline or diesel fuel as determined in § 600.208-12(b)(5)(i). (vii) For natural gas dual fuel model t ypes, for model years 2016 and later, the combined model type carbon -related exhaust emissions va lue determined according to the following formula and rounded to the nearest gram per mile: CREE = (F × CREE alt ) + ( (1-F) × CREE gas ) Where: F = 0.00 unless otherwise approved by the Admi nistrator according to the provisions of paragraph (k) of this section;
CREE alt = The combined model type carbon-related exhaust emissions value for operation on natural gas as dete rmined in § 600.208-12(b)(5)(ii); andFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 323 of 339 CREE gas = The combined model type carbon-re lated exhaust emissions value for operation on gasoline or diesel fuel as determined in § 600.208-12(b)(5)(i).
* * * * *

66. Redesignate § 600.511-80 as § 600.511-08.

67. § 600.512-12 is amended by revising para graph (c) to read as follows: § 600.512
‐ 12 Model yea r report.
* * * * * (c) The model year report must include the following information: (1)(i) All fuel economy data used in the FT P/HFET-based model type calculations under § 600.208–12, and subsequently required by the Administrator in accordance with § 600.507; (ii) All carbon-related exhaust emission data used in the FTP/HFET-based model type calculations under § 600.208–12, and subsequently required by the Administrator in accordance with § 600.507; (2) (i) All fuel economy data for certification vehicles and for vehicl es tested for running changes approved under § 86.1842 of this chapter; (ii) All carbon-related exhaust emission data for certification vehicles and for vehicles tested for running changes approve d under § 86.1842 of this chapter; (3) Any additional fuel economy and carbon-re lated exhaust emission data submitted by the manufacturer under § 600.509;Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 324 of 339 (4)(i) A fuel economy value for each model type of the manufacturer's product line calculated according to § 600.510-12(b)(2); (ii) A carbon-related exhaust emission value for each model type of the manufacturer's product line calculated acco rding to § 600.510-12(b)(2); (5)(i) The manufacturer's average fuel ec onomy value calculated according to § 600.510- 12(c); (ii) The manufacturer's average carbon-re lated exhaust emission value calculated according to § 600.510(j); (6) A listing of both domestically and nondomestic ally produced car lines as determined in § 600.511 and the cost information upon which the determination was made; and (7) The authenticity and accuracy of producti on data must be attested to by the corporation, and shall bear the si gnature of an officer (a corp orate executive of at least the rank of vice-president) designate d by the corporation. Such a ttestation shall constitute a representation by the manufacturer that the manufacturer has established reasonable, prudent procedures to ascerta in and provide production da ta that are accurate and authentic in all material respects and that these procedures have been followed by employees of the manufacturer involved in the reporting process. The signature of the designated officer shall constitute a representation by the required attestation. (8) [Reserved] (9) The “required fuel economy level” pursuant to 49 CFR parts 531 or 533, as applicable. Model year reports shall include information in sufficient detail to verify the accuracy of the calculated required fuel ec onomy level, including but is not limited to, production information for each unique footprint within each model t ype contained in theFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 325 of 339 model year report and the formula used to calculate the required fuel economy level. Model year reports shall incl ude a statement that the met hod of measuring vehicle track width, measuring vehicle wheelbase and calcu lating vehicle footprin t is accurate and complies with applicable Department of Transportation requirements. (10) The “required fuel economy level” pursuant to 49 CFR parts 531 or 533 as applicable, and the applicable fleet average CO2 emission standards. Model year reports shall include information in sufficient detail to verify the accuracy of the calculated required fuel economy level and fleet averag e CO2 emission standards, including but is not limited to, production information for each unique footprint within each model type contained in the model year report and the fo rmula used to calculate the required fuel economy level and fleet average CO2 emissi on standards. Model year reports shall include a statement that the method of meas uring vehicle track width, measuring vehicle wheelbase and calculating vehicl e footprint is accurate and complies with applicable Department of Transportati on and EPA requirements. (11) A detailed (but easy to understand) list of vehicle mode ls and the applicable in-use CREE emission standard. The list of models shall include the applicable carline/subconfiguration paramete rs (including carline, equiva lent test weight, road-load horsepower, axle ratio, engine code, transmission class, tr ansmission configuration and basic engine); the test parameters (ETW a nd a, b, c, dynamometer coefficients) and the associated CREE emission standard. The ma nufacturer shall pr ovide the method of identifying EPA engine code fo r applicable in-use vehicles.

68. § 600.513-08 is revised to read as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 326 of 339 § 600.513
‐ 08 Gas Guzzler Tax. (a) This section applies o nly to passe nger automobiles sold after December 27, 1991, regardless of the model year of those vehicles. For alcohol du al fuel and natural gas dual fuel automobiles, the fuel economy while su ch automobiles are operated on gasoline will be used for Gas Guzzler Tax assessments. (1) The provisions of this section do not apply to passenge r automobiles exempted for Gas Guzzler Tax assessments by applicable federal law and regula tions. However, the manufacturer of an exempted passenger au tomobile may, in its discretion, label such vehicles in accordance with th e provisions of this section. (2) For 1991 and later model year passenge r automobiles, the combined FTP/HFETbased model type fuel economy value determined in § 600.208 used for Gas Guzzler Tax assessments shall be calculated in accordan ce with the following equation, rounded to the nearest 0.1 mpg:

FE adj = FE[((0.55 × a g × c) + (0.45 × c) + (0.5556 × a g ) + 0.4487) / ((0.55 × a g ) + 0.45)] +

IW g Where:

FE adj = Fuel economy value to be used for determination of gas guzzler tax assessment rounded to the nearest 0.1 mpg. FE = Combined model type fuel econo my calculated in accordance with § 600.208, rounded to the nearest 0.0001 mpg.

a g = Model type highway fuel economy, cal culated in accordance with § 600.208, rounded to the nearest 0.0001 mpg divided by the mode l type city fuel economy calculated inFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 327 of 339 accordance with § 600.208, rounded to the ne arest 0.0001 mpg. The quotient shall be rounded to 4 decimal places. c = gas guzzler adjustment factor = 1.300 × 10 − 3 for the 1986 and later model years.

IW g = (9.2917 × 10 − 3 × SF 3IWCG FE 3IWCG )

− (3.5123 × 10 − 3 × SF 4ETWG × FE 4IWCG ). Note: Any calculated value of IW less than zero shall be set equal to zero.
SF 3IWCG = The 3000 lb. inertia weight class sales in the model type divided by the total model type sales; the quotient shall be rounded to 4 decimal places.
SF 4ETWG = The 4000 lb. equivalent test weight sale s in the model type divided by the total model type sales, the quotient sh all be rounded to 4 decimal places.

FE 3IWCG = The 3000 lb. inertial weight class base level combined fuel economy used to calculate the model type fuel ec onomy rounded to the nearest 0.0001 mpg.

FE 4IWCG = The 4000 lb. inertial weight class base level combined fuel economy used to calculate the model type fuel ec onomy rounded to the nearest 0.001 mpg. (b)(1) For passenger automobiles sold af ter December 31, 1990, with a combined FTP/HFET-based model type fuel economy valu e of less than 22.5 mpg (as determined in § 600.208), calculated in accordance with paragra ph (a)(2) of this section and rounded to the nearest 0.1 mpg, each vehicle fuel econom y label shall include a Gas Guzzler Tax statement pursuant to 49 U.S.C. 32908(b)(1)(E ). The tax amount stated shall be as specified in paragraph (b )(2) of this section. (2) For passenger automobiles with a combin ed general label model type fuel economy value of:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 328 of 339 At least... but less th an... the Gas Guzzler Tax statement shall show a tax of ... (i) 22.5 — $0 (ii) 21.5 22.5 $1,000 (iii) 20.5 21.5 $1,300 (iv) 19.5 20.5 $1,700 (v) 18.5 19.5 $2,100 (vi) 17.5 18.5 $2,600 (vii) 16.5 17.5 $3,000 (viii) 15.5 16.5 $3,700 (ix) 14.5 15.5 $4,500 (x) 13.5 14.5 $5,400 (xi) 12.5 13.5 $6,400 (xii) — 12.5 $7,700

Appendix I to Part 600—High way Fuel Economy Driving Schedule

69. The heading for Appendix I is revised as set forth above.

70. Appendix II is amended by revising para graph (b)(4) to read as follows: Appendix II to Par t 600—Sample Fuel Economy Calculations

* * * * * (b) * * * (4) Assume that the same vehicle was test ed by the Federal Highway Fuel Economy Test Procedure and a calculation similar to that show n in (b)(3) of this section resulted in a highway fuel economy of MPG h of 36.9. According to the procedure in § 600.210-08(c) or § 600.210–12(c), the combined fuel economy (called MPG comb ) for the vehicle may be calculated by substituting the city and highw ay fuel economy values into the following equation:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 329 of 339 Appendix IV to Part 600—Sample Fuel Econom y Labels for 2008 through 2011 Model

Year Vehicles

71. The heading for Appendix IV is revised as set forth above.

Appendix V to Par t 600—Fuel Economy Label Style Guidelines for 2008 through 2011

Model Year Vehicles

72. The heading for Appendix V is revised as set forth above.

73. Appendix VI is revised to read as follows:Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 330 of 339 Appendix VI to Part 600—Sample Fuel Econom y Labels and Style Guidelines for 2012

and Later Model Years
A. Gasoline-fueled or diesel-fueled vehicles , including hybrid electric vehicles with no plug-in capabilities.Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 331 of 339Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 332 of 339 B. Dual Fuel Vehicle Label (Ethanol/Gasoline)Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 333 of 339 C. Natural Gas Vehicle LabelFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 334 of 339 D. Plug-in Hybrid El ectric Vehicle LabelFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 335 of 339 E. Electric Vehicle LabelFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 336 of 339 Appendix VIII. --- [Removed]

74. Appendix VIII is removed.

Department of Transportation 49 CFR Chapter V

In consideration of the foregoing, under the authority of 15 U.S.C. 1232 and 49 U.S.C. 32908 and delegation of authority at 49 CF R 1.50, NHTSA proposes to amend 49 CFR Chapter V as follows:

PART 575—CONSUMER INFORMATION 1. The authority citation for part 575 continues to read as follows: Authority: 49 U.S.C. 32302, 30111, 30115, 30117, 30166, and 20168, Pub. L. 104-414, 114 Stat. 1800, Pub. L. 109-59, 119 Stat . 1144, 15 U.S.C. 1232(g); delegation of authority at 49 CFR 1.50. 2. Amend § 575.301 by revi sing the section heading and adding a new paragraph (d)(6) to read as follows: § 575.301 Vehicle labeling of safety rating information.
* * * * * (d) * * * (6) [forthcoming]Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 337 of 339 * * * * * 3. Add Subpart E to part 575 to read as follows: Subpart E – Fuel Economy, Greenhouse Ga s Emissions, and Other Pollutant Emissions Labeling for New Passenger Cars and Light Trucks; Consumer Information [forthcoming]Fuel Economy Labeling NPRM for OMB Review 8-26-10

Page 338 of 339 Proposed Rulemaking Revisions and Additions to Moto r Vehicle Fuel Economy Label Page 336 of 337 Dated:

________________________________ Ray LaHood, Secretary, Department of TransportationFuel Economy Labeling NPRM for OMB Review 8-26-10

Page 339 of 339 Proposed Rulemaking Revisions and Additions to Moto r Vehicle Fuel Economy Label Page 337 of 337

Dated:

_______________________________________ Lisa P. Jackson, Administrator, Environmental Protection Agency